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Tag: Leading economic indicators

  • EXPLAINER: 5 key takeaways from the November jobs report

    EXPLAINER: 5 key takeaways from the November jobs report

    WASHINGTON — For nearly nine months, the Federal Reserve has relentlessly raised interest rates to try to slow the U.S. job market and bring inflation under control.

    And for just as long, the job market hasn’t seemed to get the message.

    The November employment report the government issued Friday was no exception. Employers added 263,000 jobs — a substantial gain that was far above economists’ expectations. Wages rose robustly, too, further intensifying the inflationary pressures the Fed has been struggling to contain.

    And the unemployment rate remained at 3.7%, barely above the half-century low of 3.5%.

    Friday’s hiring data left economists scratching their heads over the job market’s resilience and the continuing need of many employers for more workers.

    “The Fed is tightening monetary policy, but somebody forgot to tell the labor market,’’ said Brian Coulton, chief economist at Fitch Ratings.

    The Fed’s inflation challenge began after the economy roared back from the pandemic recession two years ago, causing vast shortages of goods and sending prices soaring. After assuming — falsely — for months that high inflation would prove short-lived, the Fed finally began raising its key short-term rate in March this year.

    Since then, its rate hikes have been recurrent and aggressive. The Fed has raised its benchmark rate six times, including four straight increases of three-quarters of a point — far larger than the usual quarter-point hikes. Later this month, it’s expected to raise its key rate by an additional half-point.

    Because the Fed’s rate affects borrowing rates across the economy, its hikes have had the effect of making loans much costlier for consumers and businesses. The idea is that individuals and companies would then cut back on borrowing and spending, and employers would slow their hiring.

    But the economy — and especially the job market — have proved surprisingly durable in the face of the Fed’s anti-inflation campaign, a fact underscored by Friday’s strong jobs numbers.

    The central bank’s goal is to achieve 2% annual inflation. It has a long way to go, to say the least: The most recent inflation report showed consumer prices up 7.7% from a year earlier.

    Here are five takeaways from the November jobs report:

    ———

    TOO HOT FOR THE FED

    Last year, the economy added a record 6.7 million jobs, and it tacked on an average of 457,000 a month more from January through July this year. Since then, hiring has cooled, to a monthly average of 277,000 from August through November. Yet it’s still running way too hot for the Fed’s inflation fighters and is consistently beating forecasters’ expectations.

    With nearly two job openings for every unemployed American, companies are struggling to find workers and retain the ones they have. A tight job market tends to keep upward pressure on wages and to feed into inflation.

    “This is another solid report that shows just how difficult it is going to be for the Fed to get inflation back to target,’’ economists Thomas Simons and Aneta Markowska of the investment banking firm Jefferies wrote in a research note Friday.

    ————

    RISING WAGES

    Average hourly earnings rose 0.6% from October to November — the strongest month-to-month gain since January. And measured over the past 12 months, average pay was up a more-than-expected 5.1%,

    “We had been hoping to see a clear softening,’’ said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

    Hourly pay gains were especially strong in November for workers in retail, transportation and warehousing and “information,’’ a category that includes some technology jobs.

    “Wage growth is likely to continue to remain elevated until we see a meaningful normalization in labor demand,’’ said Thomas Feltmate, senior economist at TD Economics.

    ————

    HELP WANTED: RESTAURANTS AND BARS

    Restaurants and bars added 62,000 jobs last month. The healthcare industry took on a net 45,000 new workers in November. That sector has been adding 47,000 jobs a month this year, up from an average of just 9,000 a month in 2021.

    Factories added 14,000 jobs in November. That gain occurred even though an index issued by the Institute for Supply Management showed that U.S. manufacturing activity fell last month for the first time since May 2020, when the economy was reeling from the COVID-10 outbreak.

    Last month, the economy also added 20,000 construction workers. But in a sign that higher interest rates are squeezing the housing market, the number of employees at homebuilding companies actually fell in November by 2,600.

    ————

    MISSING WORKERS

    The number of people who either have a job or are looking for one — the total labor force — declined by 186,000 in November. It was the third straight monthly drop.

    The figure remains slightly below where it stood in February 2020, just before COVID slammed into the U.S. economy. The proportion of the adult population in the labor force — the participation rate — amounted to 62.1% last month, well below the pre-pandemic 63.4%.

    The shortfall in available workers has been caused by a combination of early retirements, reduced immigration, COVID-19 deaths and a shortage of affordable child care. The shortage represents a setback in the fight against inflation: If employers had more workers to choose from, they would be under less pressure to bid up wages and thereby contribute to inflation pressures.

    ————

    TWO SURVEYS, TWO STORIES

    Friday’s report sent some mixed signals about the level of employment in the United States.

    The Labor Department’s survey of businesses delivered the headline number of 263,000 added jobs. But the department also surveyed households, and they told a different story: The number of people who said they had a job fell by 138,000 in November after having dropped by 328,000 in October.

    The survey of businesses, called the “establishment survey,” tracks how many jobs are added across the economy. The separate survey of households is used to calculate the unemployment rate.

    The two surveys sometimes tell different tales, as they did in October and November, though the disparities tend to even out over time.

    For its establishment survey, the department asks mostly large companies and government agencies how many people they had on their payrolls.

    For its household survey, it asks households whether the adults living there have a job. Those who don’t have a job but are looking for one are counted as unemployed. Those who aren’t working but aren’t seeking work are not counted as unemployed.

    Unlike the establishment survey, the household survey counts farm workers, the self-employed and people who work for new companies. It also does a better job of capturing small-business hiring.

    But the results of the household survey are likely less precise. The government surveys just 60,000 households. By contrast, it surveys 131,000 businesses and government agencies for the establishment survey.

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  • Asian shares sink on revived worries over recession, China

    Asian shares sink on revived worries over recession, China

    BANGKOK — Shares retreated in Europe and Asia on Friday ahead of the release of U.S. jobs data.

    Optimism over moves by China to ease strict pandemic controls appeared to have faded, replaced by worries over indications recession may be looming.

    Oil prices fell as the European Union was edging closer to a $60-per-barrel price cap on Russian oil in a maneuver designed to keep Russian oil flowing into global markets while clamping down on President Vladimir Putin’s ability to fund his war in Ukraine.

    U.S. benchmark crude oil lost 16 cents to $81.06 per barrel in electronic trading on the New York Mercantile Exchange. It gained 67 cents to $81.22 per barrel on Thursday.

    Brent crude oil, the standard for pricing oil for international trading, shed 6 cents to $86.82 a barrel.

    Germany’s DAX was flat at 14,489.59 and the CAC 40 in Paris lost 0.5% to 6,723.62. Britain’s FTSE 100 gave up 0.5% to 7,522.46.

    The futures for the S&P 500 and the Dow Jones Industrial Average were 0.1% lower.

    Action was muted as traders awaited a closely watched monthly report on jobs due out Friday that will show how the labor market is holding up, which may influence what the Fed does next in its bid to cool inflation.

    A moderate reading might improve buying sentiment, said Ipek Ozkardeskaya of Live.com, given that “investors are dying to price in the goldilocks scenario, which is the sweet combination of slowing inflation, but a mild economic slowdown, which means mild deterioration in the U.S. jobs data.”

    Shares fell in New York on Thursday after a U.S. measure of inflation that’s closely watched by the Federal Reserve eased in October, raising questions over the central bank’s determination to keep raising interest rates to tame price increases.

    A report by the Institute for Supply Management also showed that prices are falling and that American manufacturing contracted in November for the first time since May 2020.

    Slower growth due to tighter monetary policies has slowed new orders and order backlogs, “which saw manufacturing conditions contracting for the first time since June 2020,” Jun Rong Yeap of IG said in a report. That may suggest that with “inflation risks behind us now, ‘bad news’ in economic data may not be ‘good news’ for markets as recession fears could be brewing,” he said.

    Signs of weakening trade, especially for export dependent economies in Asia, have deepened worries over slowing growth in China and its implications for the global economy.

    Tokyo’s Nikkei 225 index lost 1.6% to 27,777.90 and the Hang Seng in Hong Kong fell 0.3% to 18,675.35. The Kospi in Seoul shed 1.8% to 2,434.33.

    The Shanghai Composite index gave up 0.3% to 3,156.14 and Australia’s S&P/ASX 200 slipped 0.7% to 7,301.50.

    Bangkok’s SET index lost 0.5% and the Sensex in Mumbai was down 0.7%.

    The declines followed a 0.1% retreat Thursday in the benchmark S&P 500. The Dow industrials fell 0.6%, while the Nasdaq edged 0.1% higher. The Russell 2000 index of small companies fell 0.3%.

    Markets rallied Wednesday after Fed Chair Jerome Powell the central bank could begin moderating its pace of rate hikes at its next meeting in mid-December. The Fed, though, has been very clear about its intent to continue raising interest rates until it is sure that inflation is cooling.

    A big concern for Wall Street has been whether the Fed can tame rates without sending the economy into a recession as it hits the brakes on growth. Businesses are seeing demand fall for a wide range of goods as inflation squeezes wallets. Analysts generally expect the U.S. to dip into a recession, even if it is mild and short, at some point in 2023.

    In currency dealings, the U.S. dollar slipped to 133.90 Japanese yen from 135.31 yen late Thursday. The euro rose to $1.0540 from $1.0522.

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  • Applications for jobless benefits decline last week

    Applications for jobless benefits decline last week

    WASHINGTON — The number of Americans applying for unemployment benefits came back down last week, hovering near levels suggesting the U.S. labor market has been largely unaffected by the Federal Reserve’s aggressive interest rate hikes.

    Applications for jobless aid fell to 225,000 for the week ending Nov. 26, a decline of 16,000 from the previous week’s 241,000, the Labor Department reported Thursday. The four-week moving average of claims, which evens out week-to-week swings, inched up by 1,750 to 227,000.

    Applications for unemployment benefits are a proxy for layoffs, and viewed with other employment data, shows that American workers are enjoying extraordinary job security at the moment, despite an economy with some glaring weaknesses.

    To combat inflation that hit four-decade highs earlier this year, the Federal Reserve has raised its benchmark interest rate six times since March. The housing market has buckled under the strain of mortgage rates that have more than doubled from a year ago. Many economists expect the United States to slip into a recession next year with more Fed rate hikes expected to increase borrowing costs and slow economic activity.

    Early this month, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.

    On Wednesday, Fed Chair Jerome Powell said the central bank would push interest rates higher than previously expected and keep them there for an extended period until inflation was under control. Powell did add that the size and pace of those increases could be scaled back from the jumbo three-quarters of a point increases the Fed made at its last four meetings.

    In spite of persistent inflation and rapidly rising interest rates, U.S. employers added 261,000 jobs last month and are creating an average of nearly 407,000 a month this year. That pace would make 2022 the second-best year for hiring — after 2021 — in government records going back to 1940. There are nearly two job openings for every unemployed American. The unemployment rate is 3.7%, a couple of ticks above a half-century low.

    The government issues its November jobs report on Friday.

    New weekly applications for unemployment benefits have been extremely low early this year — staying below 200,000 for much of February, March and April. They began to tick up in late spring and hit 261,000 in mid-July before trending lower again.

    The Labor Department said Thursday that 1.61 million people were receiving jobless aid the week that ended Nov. 19, up 57,000 from the week before.

    The tech and real estate sectors have been outliers in an otherwise robust employment market, with Facebook, Twitter, Amazon, DoorDash, Redfin and Compass all announcing significant layoffs in recent months.

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  • US job openings fell in October to still-high level

    US job openings fell in October to still-high level

    WASHINGTON — U.S. job openings dropped in October but remained high, a sign that businesses became slightly less needy for workers as the Federal Reserve ramps up interest rates in an effort to cool the economy.

    Employers posted 10.3 million job vacancies in October, down from 10.7 million in September, the Labor Department said Wednesday. Even with the drop, openings were slightly lower in August, when they dipped below 10.3 million before rebounding the following month.

    The number of people quitting their jobs also slipped in October, to 4 million from 4.1 million.

    The Federal Reserve is closely monitoring the figures on job openings and quits for signals about the strength of the job market. The Fed is seeking to pull off a delicate task by slowing hiring and the broader economy to cool inflation, but not so much as to cause a recession.

    While more job openings are a benefit for those seeking work, Fed officials would like to see the number of openings fall. That’s because fewer openings would indicate less competition between businesses to find and keep workers, reducing pressure on them to raise wages.

    The number of open jobs dropped last month in construction, manufacturing, professional services such as architecture and engineering, and health care. They rose in financial services and remained high for restaurants, bars, and hotels.

    “The labor market is cooling (what the Fed wants) but it is far from cold,” Jennifer Lee, an economist at BMO Capital Markets, said in an email.

    Fed officials would also like to see the number of people quitting decline. When workers quit, they typically do so for a new, higher-paying job. Since the pandemic, people who have left one job for a new one have been getting historically large wage increases.

    Many businesses then pass on the higher labor costs to customers through price increases, fueling inflation.

    The Fed would like to slow — though not eliminate — wage gains, so it is hoping that its rate hikes will bring down the number of jobs that companies advertise.

    Fed Chair Jerome Powell is scheduled to speak about inflation and the labor market in a highly-anticipated speech Wednesday afternoon. Wall Street traders in particular will watch his speech closely for any signs he may give of how much further the Fed will raise interest rates.

    Powell’s appearance comes two days before the U.S. releases critical employment data for November.

    The Fed has hiked its benchmark interest rate six times this year to a range of 3.75% to 4%, the highest in about 15 years, in a bid to quell rampant inflation. Prices have soared 7.7% in the past year, near the highest in four decades. The Fed typically seeks to slow price increases by weakening the economy and pushing up unemployment, which reduces spending and often brings down inflation.

    However, with job openings so high — they hit a two-decade record of 11.9 million in March — many Fed officials hope they can bring down wage increases and inflation by sharply reducing openings, without causing layoffs to rise significantly. Many economists are skeptical that such an approach can succeed, because historically layoffs have also risen when job openings have gone down.

    Wednesday’s report — known as the Job Openings and Labor Turnover Survey — provides greater detail about the labor market, while the monthly jobs report on Friday includes the unemployment rate and the number of jobs added or lost each month.

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  • Stocks waver on Wall Street ahead of speech by Fed chair

    Stocks waver on Wall Street ahead of speech by Fed chair

    NEW YORK — Stocks are wavering in early trading on Wall Street ahead of a speech by Jerome Powell, the chair of the Federal Reserve, on the outlook for the economy and inflation. Treasury yields were higher and crude oil prices rose. The S&P 500 index was hovering around the breakeven line after the first few minutes of trading Wednesday. The tech-heavy Nasdaq was up 0.3% and the Dow Jones Industrial Average fell 0.2%. European markets were trading higher and Asian markets closed mixed overnight. The yield on the 10-year Treasury note, which influences mortgage rates, rose to 3.77%.

    THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

    U.S. markets are flat ahead of a highly anticipated that may give clues about future interest rate hikes.

    On the last trading day of the month, futures for the Dow Jones industrials and the S&P 500 appeared static. Major U.S. indices are clinging to small gains in November, which if they hold, would be the second straight month of advances after a miserable September.

    There is hope on Wall Street that the Fed will slow the scale and pace of its interest rate hikes and investors are closely watching the latest data on inflation, consumer spending and the employment market. They’ll be looking for any signs of a shift in policy when Powell speaks at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday.

    The Fed’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.

    The U.S. government will be releasing several reports about the labor market this week. A report about job openings and labor turnover for October will be released Wednesday, followed by a weekly unemployment claims report Thursday. The closely watched monthly report on the job market will be released on Friday.

    Investors were also keeping tabs on China, where protests have erupted over the “zero-COVID” strategy that has confined millions of people to their homes, sometimes for months.

    China has eased some controls after demonstrations in at least eight mainland cities and Hong Kong. It’s unclear if protests will start up again after authorities detained an unknown number of people and stepped up surveillance.

    Renewed restrictions on businesses and other activity have hit manufacturing, with an official survey announced Wednesday showing the purchasing managers index falling to 48.0 in November from 49.2 the month before. The index is on a scale of 0 to 100 where readings 50 and above show expansion.

    “A further fall in the new orders and new export orders indices suggests this was largely driven by weakening domestic and foreign demand,” Capital Economics said in a report. “Today’s surveys suggest that intensified virus disruption has delivered another blow to the economy this month.”

    Japan’s benchmark Nikkei 225 lost 0.2% to finish at 27,968.99 after reports said industrial production contracted 2.6% in October, compared with 1.7% in September, amid weakening demand from China and other world markets.

    Other regional markets advanced.

    Hong Kong’s Hang Seng added 2.1% to 18,584.49. The Shanghai Composite index inched up less than 0.1% to 3,151.34. Australia’s S&P/ASX 200 rose 0.4% to 7,284.20, while South Korea’s Kospi rose 1.6% to 2,472.53.

    “Due to a more reflective approach to the recent zero-COVID measures, Chinese stocks have taken substantial leaps and bounds this week. However, that optimism is giving way to hawkish contemplation as traders twiddle their thumbs awaiting a speech from Federal Reserve Chair Jerome Powell later Wednesday,” Stephen Innes, a managing partner at SPI Asset Management, said in a report.

    Shares in Europe climbed higher at midday after a report showed that inflation in the 19 countries that use the euro currency eased for the first time in more than a year as energy prices retreated from painful highs. But the 10% rate, a drop from 10.6% in October, still hovers near a record that has robbed consumers of their spending power and led economists to predict a recession.

    Britain’s FTSE 100 and France’s CAC 40 each added 0.8%, while Germany’s DAX gained 0.4%.

    In energy trading, benchmark U.S. crude gained $1.67 to $79.87 a barrel. Brent crude, the international standard, added $1.72 to $85.97 a barrel.

    In currency trading, the U.S. dollar rose to 138.72 Japanese yen from 138.65 yen. The euro cost $1.0365, up from $1.0331.

    ———

    Kageyama reported from Tokyo; Ott reported from Washington.

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  • How major US stock indexes fared Friday 11/25/2022

    How major US stock indexes fared Friday 11/25/2022

    Stocks wobbled to a mixed close on Wall Street, but every major index notched weekly gains in a holiday-shortened week.

    The S&P 500 edged lower Friday. The Dow Jones Industrial Average rose and the Nasdaq fell. Technology stocks were the biggest drags on the broader market. Markets were closed on Thursday for the Thanksgiving holiday and closed at 1 p.m. Eastern Friday.

    Long-term bond yields were relatively stable and crude oil prices fell. Global shares were mixed amid worries about China’s lockdowns and restrictions to curb the spread of coronavirus infections.

    On Friday:

    The S&P 500 fell 1.14 points, or less than 0.1%, to 4,026.12.

    The Dow Jones Industrial Average rose 152.97 points, or 0.4%, to 34,347.03.

    The Nasdaq fell 58.96 points, or 0.5%, to 11,226.36.

    The Russell 2000 index of smaller companies rose 5.67 points, or 0.3%, to 1,869.19.

    For the week:

    The S&P 500 is up 60.78 points, or 1.5%.

    The Dow is up 601.34 points, or 1.8%.

    The Nasdaq is up 80.29 points, or 0.7%.

    The Russell 2000 is up 19.46 points, or 1.1%.

    For the year:

    The S&P 500 is down 740.06 points, or 15.5%.

    The Dow is down 1,991.27 points, or 5.5%.

    The Nasdaq is down 4,418.61 points, or 28.2%.

    The Russell 2000 is down 376.12 points, or 16.8%.

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  • Asian shares mixed as investors eye Tokyo inflation data

    Asian shares mixed as investors eye Tokyo inflation data

    TOKYO — Asian shares were mixed Friday as worries deepened about the regional economy and Japan reported higher-than-expected inflation.

    Benchmarks fell in Tokyo, Seoul and Hong Kong, but rose in Sydney and Shanghai. Oil prices advanced.

    Investors have their eyes on China‘s lockdowns and restrictions to curb the spread of coronavirus infections, as the direction China takes will have great impact on the rest of Asia.

    “Reopening policies have pivoted in China, which will be a gradual process. COVID control measures will vary across cities, but positive top-down approaches will be ongoing,” said Stephen Innes, Stephen Innes, managing partner at SPI Asset Management.

    Japan’s benchmark Nikkei 225 lost 0.3% in morning trading to 28,286.40. Australia’s S&P/ASX 200 rose 0.3% to 7,262.40. South Korea’s Kospi edged down 0.1% to 2,438.19. Hong Kong’s Hang Seng slipped 0.8% to 17,521.11. The Shanghai Composite gained 0.5% to 3,105.36.

    Data on inflation in Tokyo for November beat analysts’ expectations, with the core consumer price index showing a 3.6% rise, the highest in more than four decades.

    The Federal Reserve and the world’s other central banks have been raising interest rates to try to rein in decades-high inflation. But the Bank of Japan has resisted tightening monetary policy, a move that would counter inflationary pressures by discouraging borrowing by businesses and consumers.

    “With the Bank of Japan being one of the few outliers which has not embarked on a rate-hiking process, the point of pivot will be a key question into next year,” Jun Rong Yeap of IG said in a commentary.

    Shares finished higher Thursday in France, Germany and Britain. U.S. markets were closed for Thanksgiving. Wall Street will have a shortened session on Friday.

    In energy trading, benchmark U.S. crude rose 46 cents to $78.40 a barrel in electronic trading on the New York Mercantile Exchange. It gave up $3.01 to $77.94 per barrel on Thursday. Brent crude, the international standard, added 29 cents to $85.55 a barrel in London.

    In currency trading, the U.S. dollar rose to 138.64 Japanese yen from 138.58 yen. The euro cost $1.0410, inching down from $1.0411.

    ———

    Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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  • Fed at last meeting saw few signs that inflation was easing

    Fed at last meeting saw few signs that inflation was easing

    WASHINGTON — Federal Reserve officials at their last meeting saw “very few signs that inflation pressures were abating” before raising their benchmark interest rate by a substantial three-quarters of a point for a fourth straight time.

    Rising wages, the result of a strong job market, combined with weak productivity growth, were “inconsistent” with the Fed’s ability to meet its 2% target for annual inflation, the policymakers concluded, according to the minutes of their Nov. 1-2 meeting released Wednesday.

    But they also agreed that smaller rate hikes “would likely soon be appropriate.″ The Fed is widely expected to slow its rate hikes to a half-point increase when it next meets in mid-December.

    At their meeting early this month, the Fed officials also expressed uncertainty about how long it might take for their rate hikes to slow the economy enough to tame inflation. Chair Jerome Powell stressed at a news conference after this month’s meeting that that the Fed isn’t even close to declaring victory in its fight to curb high inflation.

    Still, some of the policymakers expressed hope that falling commodity prices and the unsnarling of supply chain bottlenecks “should contribute to lower inflation in the medium term.’’ Earlier this month, the government reported that price increases moderated in October in a sign that the inflation pressures might be starting to ease. Consumer inflation reached 7.7% in October from a year earlier and 0.4% from September. The year-over-year increase was the smallest rise since January.

    Wednesday’s minutes revealed that Fed officials expected ongoing rate increases to be “essential’’ to keep Americans from expecting inflation to continue indefinitely. When people expect further high inflation, they act in ways that can make those expectations self-fulfilling — by, for example, demanding higher wages and spending vigorously before prices can further accelerate.

    The Fed officials noted that employers were resisting layoffs even as the economy slowed, apparently “keen” to hold onto workers after a year and a half of severe labor shortages. The U.S. unemployment rate is 3.7%, just above a half-century low.

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  • How major US stock indexes fared Friday 11/18/2022

    How major US stock indexes fared Friday 11/18/2022

    Stocks ended higher on Wall Street but still wound up with weekly losses after several days of bumpy trading.

    Some retailers posted big gains after reporting surprisingly strong quarterly results and giving investors encouraging forecasts. Gap, Ross Stores and Foot Locker all rose sharply. Energy stocks fell along with crude oil prices.

    The S&P 500 rose Friday. The Nasdaq ended just barely in the green and the Dow Jones Industrial Average rose. The yield on the 10-year Treasury note, which helps set mortgage rates, gained ground.

    On Friday:

    The S&P 500 rose 18.78 points, or 0.5%, to 3,965.34.

    The Dow Jones Industrial Average rose 199.37 points, or 0.6%, to 33,745.69.

    The Nasdaq rose 1.10 points, or less than 0.1%, to 11,146.06.

    The Russell 2000 index of smaller companies rose 10.61 points, or 0.6%, to 1,849.73.

    For the week:

    The S&P 500 is down 27.59 points, or 0.7%.

    The Dow is down 2.17 points, or less than 0.1%.

    The Nasdaq is down 177.27 points, or 1.6%.

    The Russell 2000 is down 33.01 points, or 1.8%.

    For the year:

    The S&P 500 is down 800.84 points, or 16.8%.

    The Dow is down 2,592.61 points, or 7.1%.

    The Nasdaq is down 4,498.91 points, or 28.8%.

    The Russell 2000 is down 395.58 points, or 17.6%.

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  • US stocks waver, remain on track to end week with losses

    US stocks waver, remain on track to end week with losses

    NEW YORK — Stocks wavered in afternoon trading on Wall Street Friday and are heading for losses for the week after several days of bumpy trading.

    The S&P 500 fell 0.2% as of 12:26 p.m. Eastern. The benchmark index had traded as high as 0.8% earlier in the day. The Dow Jones Industrial Average rose 42 points, or 0.1%, to 33,593 and the Nasdaq fell 0.6%.

    Small company stocks did better than the the rest of the market. The Russell 2000 rose 0.2%.

    Major indexes are all on track for weekly losses.

    Health care and financial companies were among the biggest gainers. UnitedHealth Group rose 2.9% and Charles Schwab rose 2%.

    Energy stocks fell along with sliding energy prices. U.S. crude oil fell 2.8% and Exxon Mobil fell 1.4%.

    Retailers made solid gains after several companies reported strong financial results and gave investors encouraging financial forecasts. Discount retailer Ross Stores surged 10.3% and clothing retailer Gap rose 7.8% after beating analysts’ expectations. Foot Locker rose 2.9% after raising its profit and revenue forecast for the year.

    The solid earnings from retailers cap off a shaky week for Wall Street as investors try to get a better sense of inflation’s path and its impact on consumers and businesses. Investors have been particularly anxious about the Federal Reserve’s fight against inflation and have been looking for signs that might allow the central bank to shift to less aggressive interest rate increases. That anxiety was heightened on Thursday after a Fed official suggested U.S. interest rates might have to be raised higher than expected to cool inflation.

    “It’s all been the same story for a year,” said Keith Buchanan, portfolio manager at Globalt Investments. “It’s about what inflation is doing, how the Fed responds, and from there how does the consumer respond.”

    The central bank has already warned that the main lending rate may have to rise to a more painful level than anybody had anticipated, possibly between 5% and 7%. The Fed’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.

    The Fed is trying to tame the hottest inflation in decades by making borrowing more difficult and curtailing spending. Several big measures of inflation have shown that prices are easing a bit, but other economic indicators show that consumers remain resilient, as does the jobs market.

    The Fed’s strategy risks sending the economy into a recession if it hits the brakes too hard on economic growth. The latest mix of inflation and economic data has Wall Street trying to gauge whether the Fed needs to keep pushing along with interest rate increases and whether it can achieve its goal without severely crimping consumer spending or employment.

    The U.S. reported this week that retail sales rose 1.3% in October as Americans increase their spending at stores, restaurants, and auto dealers, a sign of consumer resilience as the holiday shopping season begins. That’s not to say consumer behavior hasn’t been affected by inflation. Major retailers say Americans are holding out for sales, refusing to pay full price, with the cost of gasoline, rent, food and almost everything else much higher than it was last year.

    European markets were higher and Asian markets closed mixed overnight.

    Bond yields rose. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.82% from 3.77%.

    ———

    Joe McDonald and Matt Ott contributed to this report.

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  • Blizzard, NetEase gaming partnership in China to end

    Blizzard, NetEase gaming partnership in China to end

    HONG KONG — American game developer Blizzard Entertainment said Thursday that it will suspend most of its game services in mainland China after current licensing agreements with Chinese games company NetEase end, sending NetEase’s shares tumbling.

    Blizzard, which partnered with NetEase in 2008 to offer popular games like World of Warcraft, Overwatch and Diablo in mainland China, said in a statement the two companies did not reach a deal to renew the agreements “that is consistent with Blizzard’s operating principles and commitments to players and employees.”

    The partnership is set to expire in January next year. Blizzard said that new sales will be “suspended in the coming days.”

    NetEase shares plunged as much as 15% in Hong Kong following the news.

    In a statement, NetEase said that the expiration of its licenses with Blizzard would have “no material impact” on the company’s financial results.

    The company said revenues and income from the licensed Blizzard games represented “low single digits” as a total percentage of NetEase’s total revenues and income last year, and in the first three quarters of 2022.

    “We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China,” William Ding, CEO of NetEase, said in the statement. “However, there were material differences on key terms and we could not reach an agreement.”

    Blizzard Entertainment CEO Mike Ybarra said that the firm is looking for alternatives to bring the games back to Chinese players in the future.

    “We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” Ybarra said.

    The games affected by the suspension are World of Warcraft, the StarCraft series, Hearthstone, Heroes of the Storm, Overwatch and Diablo III.

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  • US stocks slip as Target stumbles, weighs on retailers

    US stocks slip as Target stumbles, weighs on retailers

    NEW YORK — Stocks fell in afternoon trading on Wall Street Wednesday as investors reviewed a dismal financial report from Target and a broader update on the retail sector from the government.

    The S&P 500 fell 0.5% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average rose 56 points, or 0.2%, to 33,645 and the Nasdaq fell 1.2%.

    Retailers weighed heavily on the market. Target slumped 11.8% after cutting its forecasts for the holiday season following a surprisingly big drop in its third-quarter profits. Auto parts retailer Advance Auto Parts fell 17.4% after reporting weak financial results.

    Macy’s, which reports its financial results on Thursday, fell 8.2%.

    Big technology companies also fell. Chipmaker Micron slipped 5.6% after announcing some production cuts because of weak demand. Nvidia fell 3.1%.

    Wall Street has been closely watching the latest economic updates, including reports that consumer and wholesale prices continue to cool. Much of the market’s prior rally was due to hopes inflation is easing, which could portend less aggressive hikes for interest rates from the Federal Reserve.

    The Fed has been raising interest rates in an effort to slow the economy and tame the hottest inflation in decades. Wall Street is worried that it could hit the brakes too hard on economic growth and bring on a recession.

    The latest government report on retail sales for October shows that consumer spending remains strong, though it’s unclear whether that’s because of more purchases or higher prices.

    Strong consumer spending is typically a good sign for the economy, but it could make the Fed’s strategy of cooling the economy more difficult. The central bank has already hiked its key overnight rate up to a range of 3.75% to 4% from virtually zero earlier this year. It has said it still plans to hike rates further and then to hold them at that high rate for a while in order to grind down inflation.

    “The better-than-expected retail sales results don’t bolster the case that the Fed” can ease up on its campaign to slow the economy with high interest rates, said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management.

    He said resilient consumer spending could improve the possibility that the Fed manages to pull off a so-called “soft landing” with its strategy. That would involve taming inflation without throwing the economy into a recession, or at least avoiding a damaging recession.

    Bond yields were mixed. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.73% from 3.78% from late Tuesday. The yield on the two-year Treasury rose to 4.37% from 4.35% from late Tuesday.

    Wall Street is also closely watching developments in Russia’s war against Ukraine. Tensions appear to have receded slightly after NATO member Poland and the head of the military alliance both said Wednesday there is “no indication” that a missile that came down in Polish farmland, killing two people, was an intentional attack. Air defenses in neighboring Ukraine likely launched the Soviet-era projectile to fend off a Russian assault that savaged its power grid, they said.

    “There is nothing, absolutely nothing, to suggest that it was an intentional attack on Poland,” said Polish President Andrzej Duda.

    Markets in Europe fell.

    The conflict is hanging over the energy market. A worsening war in Ukraine could cause spikes in prices for oil, gas and other commodities that the region produces. U.S. crude oil prices rose 2.7%.

    ———

    Yuri Kageyama and Matt Ott contributed to this report.

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  • How major US stock indexes fared Friday 11/11/2022

    How major US stock indexes fared Friday 11/11/2022

    Wall Street tacked more onto its stupendous surge from a day before, leaving the market with its biggest weekly gain since the summer.

    The S&P 500 rose 0.9% Friday, and the Nasdaq rose twice as much. Markets got a boost after China relaxed some of its anti-COVID measures, while a report suggested U.S. inflation expectations ticked modestly higher.

    Stocks soared this week on hopes the worst of inflation may have passed and that the Federal Reserve can be less aggressive about raising interest rates, though some analysts called the rally overdone. Crypto sank after a major exchange filed for bankruptcy.

    On Friday:

    The S&P 500 rose 36.56 points, or 0.9%, to 3,992.93.

    The Dow Jones Industrial Average rose 32.49 points, or 0.1%, to 33,747.86.

    The Nasdaq rose 209.18 points, or 1.9%, to 11,323.33.

    The Russell 2000 index of smaller companies rose 14.81 points, or 0.8%, to 1,882.74.

    For the week:

    The S&P 500 is up 222.38 points, or 5.9%.

    The Dow is up 1,344.64 points, or 4.1%.

    The Nasdaq is up 848.08 points, or 8.1%.

    The Russell 2000 is up 82.87 points, or 4.6%.

    For the year:

    The S&P 500 is down 773.25 points, or 16.2%.

    The Dow is down 2,590.44 points, or 7.1%.

    The Nasdaq is down 4,321.64 points, or 27.6%.

    The Russell 2000 is down 362.57 points, or 16.1%.

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  • Many vets are landing jobs, but the transition can be tough

    Many vets are landing jobs, but the transition can be tough

    NORFOLK, Va. — Phillip Slaughter left the Army after 18 years and found a job similar to one he had in uniform: behind the wheel of a truck. Instead of towing food and bullets through war zones, he hauled packages for FedEx.

    It wasn’t what he wanted to do. The work aggravated his post-traumatic stress disorder. It would be three years and several jobs before he landed his ideal position as a sourcing recruiter for a tech company.

    “I think it’s the first job that I’ve worked 10 consecutive months without quitting,” said Slaughter, 41, who lives in Clarksville, Tennessee.

    Slaughter is a U.S. military veteran who found a job he loves at a time when the nation is experiencing some of its lowest monthly veteran unemployment on record. But the rate — 2.7% in October — can mask the difficulty of a transition that sometimes takes years of working unfulfilling jobs, while forging a new identity and a new purpose beyond serving one’s country.

    “Even though (veteran unemployment) is low, I’m interested to see a survey on how many people are happy in the position they’re in,” said Slaughter, who also runs his own consulting firm for fellow vets.

    Veterans account for about 7% of the civilian population, according to the Bureau of Labor Statistics. Their jobless rate can help gauge the nation’s efforts to assist former service members, experts say. It can also reflect on the military and how it prepares departing personnel. High veteran unemployment is not good for recruiting.

    For this Veterans Day, a handful of former service members talked about their experiences looking for work at a time when the veteran jobless rate is so low. For some, it was easy — but others have struggled.

    Pierson Gest, a former Army infantryman, landed his first post-military job in August as a hydropower system designer in California.

    Gest joined up during the Great Recession, knowing he’d eventually go to school on the GI Bill. Starting college in 2017 was tough at first as he developed study habits. But he got the hang of it, earning his engineering degree in June.

    “I was lucky enough to negotiate a six-figure salary,” said Gest, 37, who lives outside San Francisco. “And I definitely used and leveraged my experience in the Army to negotiate that wage on top of my college degree.”

    Across the country in Florida, Thomas Holmes is still searching for his ideal job.

    Holmes, 46, left the Air Force in 2012 after 17 years, during which he maintained parachute systems for various types of aircraft, from F-15 fighter jets to U-2 spy planes.

    He said the one full-time job he’s worked, in the billing and claims department of a warehouse office, was toxic. He quit after about 18 months.

    Holmes used the GI Bill to earn three degrees, including a master’s in sports management. He found part-time work in the industry, but rising gas prices and the lure of more consistent hours prompted him to work at a nearby UPS store.

    “I’ve applied for many jobs — county jobs, state jobs, all sorts of things,” said Holmes, who lives outside Tampa. “And then all I get is: ‘Well, thanks for your service.’”

    Jayla Hair’s transition from Navy to civilian paralegal wasn’t easy, despite a bachelor’s degree in the field and skills that would seem transferable.

    Hair, 30, said she applied to about 300 jobs over eight months. After seeking help from a Navy program and friends, Hair overhauled her resume and job interviews eventually came her way. But potential employers cited her lack of experience with state laws and civilian courts.

    Hair took temporary jobs in the legal field and recently landed a full-time position as a paralegal for a Fortune 500 company in the Chicago area.

    “Just having my military experience was not enough,” said Hair, who plans to pursue a law degree in the future. “If it wasn’t for me having these temporary jobs to build my civilian resume, I don’t know where I’d be right now.”

    Hair landed her job at a time when veteran unemployment has been mostly dropping. The annual veteran jobless rate fell steadily from 8.7% in 2010 to 3.1% in 2019, according to the Bureau of Labor Statistics. Last year, after a spike fueled by the coronavirus pandemic, the annual rate was 4.4%. But the seasonally adjusted monthly percentage in March was 2.4, hailed by President Joe Biden as tied for the lowest rate on record. August also hit that mark.

    The tight labor market and demand for workers after the coronavirus pandemic is likely one factor for the low veteran jobless rates, said Jeffrey B. Wenger, a senior policy researcher at the Rand Corp. But so are significant efforts in recent years by the U.S. military, Department of Veterans Affairs and veteran service organizations to provide assistance to outgoing service members.

    Training such as resume-writing is now mandatory and American companies have launched initiatives to hire hundreds of thousands of vets.

    Many of those undertakings grew from the Great Recession and the abundance of stressed-out service members who served in Iraq and Afghanistan, which “brought the veteran employment crisis to a head,” Wenger said.

    “And over the last 10 to 15 years, people have been putting in more and more resources and have become more and more dedicated to fixing that problem,” Wenger said.

    Among them is Transition Overwatch, a firm that runs career apprenticeship programs across the country. CEO Sean Ofeldt said the company zeroes in on what active service members want to do as civilians, not what they’re doing or the skills they’ve learned in the military.

    “A lot of military members don’t want to keep doing what they did,” said Ofeldt, a former Navy SEAL. “We train them up while they’re still on active duty and then launch them into an actual career with all the support they need for that first 12 months.”

    But the formula for supporting veterans has to encompass more than just employment. It needs to focus on social challenges as well, said Karl Hamner, a University of Alabama education professor.

    Veterans can feel isolated after losing their tribe of fellow service members. Hamner said new data indicates that loss can be especially acute for women because they formed strong bonds with one another as they navigated a male-dominated military.

    In a soon-to-be released national survey of 4,700 female veterans conducted by Hamner and his colleagues, 70% said adjusting to civilian life was difficult; 71% said they needed more time to figure out what they wanted to do.

    “They had to prove themselves in a valued, highly regarded profession,” Hamner said. “And now they’re back to trying to figure out what it means to be a civilian woman and deal with all the standard discriminatory stuff.”

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  • Asian stocks surge after lower US inflation eases rate fears

    Asian stocks surge after lower US inflation eases rate fears

    BEIJING — Asian stock markets surged Friday after U.S. inflation eased by more than expected, spurring hopes the Federal Reserve might scale down plans for more interest rate hikes.

    Hong Kong’s market benchmark jumped 5.7% and Seoul rose 3.3%. Shanghai, Tokyo and Sydney advanced. Oil prices edged higher.

    Wall Street’s benchmark S&P 500 index soared 5.5% on Thursday for its biggest one-day gain in 2 1/2 years after the government reported consumer prices rose 7.7% over a year ago in October. That was lower than the 8% expected by economists and the fourth month of decline.

    The announcement “drove a ‘more dovish’ calibration of interest rate expectations,” said Yeap Jun Rong of IG in a report.

    The Fed and central banks in Europe and Asia are raising rates to cool inflation that is at multi-decade highs. Investors worry that might tip the global economy into recession. They hope lower inflation might prompt the Fed to ease off plans for more increases.

    Forecasters warned Thursday it was too early to be certain prices are under control. Fed officials have said rates might have to stay elevated for some time.

    Hong Kong’s Hang Seng index soared to 16,994.66 and the Nikkei 225 in Tokyo gained 2.9% to 28,229.68.

    The Shanghai Composite Index added 1.4% to 3,078.42 after the ruling Communist Party promised to alter quarantine and other anti-virus tactics to reduce the cost of China’s severe “zero-COVID” strategy that has disrupted the economy.

    The Kospi in Seoul rose to 2,481.50 and Sydney’s S&P-ASX 200 was up 2.7% at 7,154.20.

    India’s Sensex opened up 1.6% to 61,579.12. New Zealand and Southeast Asian markets advanced.

    On Wall Street, the S&P 500 gained to 3,956.37, propelled by big gains for tech heavyweights. Amazon soared 12.2%, Apple rose 8.9% and Microsoft climbed 8.2%.

    The Dow Jones Industrial Average gained 3.7%, or more than 1,200 points, to 33,715.37.

    The Nasdaq composite, dominated by tech stocks, shot up 7.4% to 11,114.15 for its best day since March 2020, when Wall Street was rebounding from a crash at the start of the coronavirus pandemic.

    Investors were reassured that U.S. inflation was declining from its June peak of 9.1%, though forecasters said the Fed’s campaign to cool price rises was far from over.

    Traders expect the Fed to raise its benchmark lending rate in December but by a smaller margin of half a percent following four increases of 0.75 percentage points, triple its usual margin. That benchmark stands at a range of 3.75% to 4%, up from close to zero in March.

    The Fed is trying to slow economic activity to reduce pressure for prices to rise.

    The latest figures are a sign the Fed is “on the right path,” but it will face “a lot of variables” over the next few quarters, said Edward Moya of Oanda in a report. He said the benchmark rate could be raised to 5% and “if inflation proves to be sticker, it could be as high as 5.50%.”

    Core inflation, which strips out volatile food and energy prices and is more closely watched by the Fed, was 6.3% over a year earlier, down from September’s 6.6% and below the consensus forecast of 6.5%. Core prices rose 0.3% month on month, half of September’s 0.6% gain.

    The yield on the 10-year Treasury, which helps set rates for mortgages and other loans, fell to 3.82% from 4.15%. The two-year yield, which more closely follows expectations for Fed action, fell to 4.32% from 4.62% and was on pace for its sharpest fall since 2008.

    In energy markets, benchmark U.S. crude gained 20 cents to $86.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 64 cents to $86.47 on Thursday. Brent crude, the price basis for international oil trading, advanced 20 cents to $93.87 per barrel in London. It rose $1.02 to $93.67 the previous session.

    The dollar declined to 141.52 yen from Thursday’s 141.83 yen. The euro edged up to $1.0206 from $1.0180.

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  • Global stocks decline ahead of US inflation update

    Global stocks decline ahead of US inflation update

    BEIJING — Global stock markets fell Thursday ahead of a U.S. inflation update that will likely influence Federal Reserve plans for more interest rate hikes as investors waited to see who will control Congress after this week’s elections.

    London, Shanghai, Frankfurt and Tokyo declined. U.S. futures were higher. The euro fell back below $1.

    Wall Street’s benchmark S&P 500 index tumbled Wednesday as votes were counted to decide whether Republicans take control of Congress, possibly leading to changes that can unsettle markets. Investors were rattled by the crypto industry’s latest crisis of confidence and weaker profit reports from The Walt Disney Co. and some other companies.

    Forecasters expect U.S. government data Thursday to show inflation eased in September but stayed near a four-decade high. That might reinforce arguments that rates have to stay elevated for an extended period to slow economic activity and extinguish inflation.

    “An upside surprise today would present a challenge for officials who expect to slow the pace of rate hikes,” Rubeela Farooqi of High-Frequency Economics said in a report.

    In early trading, the FTSE 100 in London was 0.1% lower at 7,285.86. The DAX in Frankfurt lost 0.1% to 13,647.47 and the CAC 40 in Paris shed 0.2% to 6,417.98.

    On Wall Street, futures for the S&P 500 and the Dow Jones Industrial Average were up 0.3%.

    On Wednesday, the S&P 500 lost 2.1%, erasing gains from a three-day rally leading up to Election Day.

    Disney sank 13.2% for the largest loss in the S&P 500 after reporting quarterly results that fell short of analysts’ expectations.

    The Dow fell 2% and the Nasdaq composite, dominated by tech companies, tumbled 2.5%.

    Facebook parent Meta Platforms rose 5.2% after saying it will cut costs by laying off 11,000 employees, or about 13% of its workforce. It is down nearly 70% for the year.

    In Asia, Hong Kong’s Hang Seng index fell 1.7% to 16,081.04 and the Nikkei 225 in Tokyo sank 1% to 27,446.10. The Shanghai Composite Index lost 0.4% to 3,036.13.

    The Kospi in Seoul declined 0.9% to 2,407.70 and Sydney’s S&P-ASX 200 was off 0.5% at 6,964.00.

    India’s Sensex shed 1% to 60,447.97. New Zealand, Bangkok and Jakarta declined while Singapore and Malaysia gained.

    The Philippines’ market benchmark lost 0.5% after the government reported the economy grew by 7.6% in the three months ending in September.

    Investors worry rate hikes this year by the Fed and central banks in Europe and Asia to cool inflation might tip the global economy into recession. Traders hope indicators that show U.S. housing sales and other activity weakening might prompt the Fed to back off plans for more rate hikes.

    In the United States, Republicans were within nine seats of the 218 needed to control the House of Representatives as votes still were being counted in some states. Control of the Senate depended on races in Nevada and Arizona that hadn’t been decided.

    The outcome will determine how the next two years of President Joe Biden’s term play out. Republicans are likely to launch a spate of investigations into Biden, his family and his administration if they take power. A GOP takeover of the Senate would hobble the president’s ability to appoint judges.

    Still, the election “impact on markets is pretty irrelevant beyond the very near term,” said David Chao of Invesco in a report. “Investors should be worried about inflation, since that will help to dictate the Fed’s future path.”

    Forecasters expect Thursday’s data to show inflation decelerated to 7.9% in September from the previous month’s 8.3%. However, prices were expected to rise 0.6% compared with August, accelerating from July’s 0.1% increase.

    Core inflation, which strips out volatile food and energy prices to show a clearer trend, is expected to accelerate to 6.5% from August’s 6.3%. That suggests costs of rent, medical services, autos and other goods and services still are rising in response to strong demand.

    Traders expect the Fed to raise rates again next month but by a smaller margin of one-half percentage point after a series of 0.75 percentage-point increases. The Fed’s key lending rate is a range of 3.75% to 4%, up from close to zero in March. A growing number of investors expect it to exceed 5% next year.

    Also Wednesday, cryptocurrencies fell amid worries about the industry’s financial strength after a big player, Binance, called off a deal to buy troubled rival FTX. That at least temporarily ended hopes for a bailout after FTX users scrambled to pull out their money.

    Bitcoin fell 14% from a day earlier to $15,900. That is down 77% from last year’s high of $69,000.

    The yield on the 10-year Treasury, which helps dictate rates for mortgages and other loans, fell to 4.08% from 4.13% late Tuesday. The two-year yield, which tends to more closely track expectations for Fed action, dropped to 4.60% from 4.66%.

    In energy markets, benchmark U.S. crude shed 49 cents to $85.34 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, lost 42 cents to $92.23 per barrel in London.

    The dollar gained to 146.31 yen from Wednesday’s 145.56 yen. The euro declined to 99.83 cents from $1.0073.

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  • Asian markets mixed ahead of US elections, inflation data

    Asian markets mixed ahead of US elections, inflation data

    TOKYO — Asian stocks were mixed Tuesday ahead of the U.S. midterm elections with trading likely to stay bumpy in a week that brings new inflation data and other events that could shake markets.

    Tokyo’s Nikkei 225 gained 1.3% to 27,876.20 on strong earnings reports. The Kospi in Seoul advanced 1.1% to 2,397.41 and Australia’s S&P/AXS 200 gained 0.4% to 6,958.90.

    Hong Kong’s Hang Seng sank 0.6% to 16,488.44, while the Shanghai Composite index shed 0.8% to 3,052.93. Thailand’s SET gained 0.7%. India’s markets were closed for a holiday.

    The week is full of potentially market-moving events, including U.S. inflation data and the election, which could leave the U.S. government split between Democrats and Republicans.

    For Tuesday, at least, “Look for markets to trade political headline spin rather than substance,” Stephen Innes of SPI Asset Management said in a commentary.

    Every seat in the U.S. House of Representatives is up for election this year, along with about a third of the U.S. Senate. On the line is control of both houses of Congress, currently under Democratic leadership.

    Voters are also electing governors in most of the states this year. They’ll be in office in 2024 when the next presidential election happens and could affect election laws or vote certifications. Many state legislative and local authorities also are on the ballot.

    A divided government would likely bring gridlock rather than big, sweeping policy changes that could upset tax and spending plans. Historically, when a Democratic White House has shared power with a split or Republican Congress, stocks have seen stronger gains than usual.

    On Monday, the benchmark S&P 500 rose 1% to 3,806.80 while the Dow Jones Industrial Average gained 1.3% to 32,827.00 and the Nasdaq composite added 0.9% to 10,564.52.

    Analysts say a strong performance by Democrats in the elections could lead to increased spending to help the economy that might fuel inflation and leave the Federal Reserve obliged to continue to hike interest rates to get prices under control.

    It may take a while to get clarity because of the process to count votes that came in through the mail.

    Economists expect a report Thursday to show the consumer price index rose 8% in October from a year earlier, slightly lower than September’s 8.2% inflation rate.

    Regardless of the outcome of Tuesday’s vote, “It is still all about inflation and while this report might not be as hot as the last few, it still should show that rents and the core-service sector part of the economy are still hot,” Edward Moya of Oanda said in a report.

    Higher rates put the brakes on the economy by making it more expensive to buy a house, car or anything else on credit, though they take time to take effect. Rate hikes could bring a recession, and they tend to drag on prices for stocks and other investments.

    A fourth straight month of moderating inflation from June’s 9.1% rate could afford the Federal Reserve leeway to loosen up a bit. The Fed has said that it may soon dial down the size of its increases to half a percentage point, after pushing through four straight mega increases of three-quarters of a point.

    Monday’s gains for Wall Street came despite a shaky showing for its most influential stock. Apple rose 0.4% after dropping earlier in the day. It had warned customers they’ll have to wait longer to get the latest iPhones after anti-COVID restrictions were imposed on a contractor’s factory in China.

    Earnings reports are also causing share prices to swing.

    The reporting season for summertime profits is roughly 85% done, and S&P 500 companies are on track to deliver growth of a little more than 2%. Analysts are forecasting a drop in S&P 500 profits for the final three months of the year, of nearly 1.5%. They had been forecasting growth of 4% at the end of September.

    In other trading, U.S. benchmark crude oil lost 50 cents to $91.29 per barrel in electronic trading on the New York Mercantile Exchange. It lost 82 cents to $91.79 per barrel on Monday.

    Brent crude, the international pricing standard, gave up 45 cents to $97.47 per barrel.

    The U.S. dollar was unchanged at 146.63 yen. The euro slipped to $1.0008 to $1.0016.

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  • Biden stumps on job growth, as voters dread inflation

    Biden stumps on job growth, as voters dread inflation

    WASHINGTON — President Joe Biden has notched an envious record on jobs, with 10.3 million gained during his tenure. But voters in Tuesday’s midterm elections are far more focused on inflation hovering near 40-year highs.

    That’s left the president trying to convince the public that the job gains mean better days are ahead, even as fears of a recession build.

    Presidents have long trusted that voters would reward them for strong economic growth, but inflation has thrown a monkey wrench into the already difficult probability of Democrats’ retaining control of the House and Senate.

    Economic anxieties have compounded as the Federal Reserve has repeatedly hiked its benchmark interest rates to lower inflation and possibly raise unemployment. Mortgage costs have shot upwards, while the S&P 500 stock index has dropped more than 20% so far this year as the world braces for a possible downturn.

    Biden is asking voters to look beyond the current financial pain, saying that what matters are the job gains that he believes his policies are fostering. The government reported Friday that employers added 261,000 jobs in October as the unemployment rate bumped up to 3.7%.

    Roughly 740,000 manufacturing jobs have been added since the start of Biden’s presidency, a figure that the president says will keep rising because of his funding for infrastructure projects, the production of computer chips and the switch to clean energy sources.

    “America is reasserting itself — it’s as simple as that,” Biden said in a Friday speech. “We also know folks are still struggling with inflation. It’s our number one priority.”

    Yet the president is also warning that a Republican majority in Congress could make inflation worse by seeking to undo his programs and treating payments on the federal debt as a bargaining chip instead of an obligation to honor.

    His challenge is that the party in power generally faces skeptical voters in U.S. midterms and inflation looms over the public mindset more than job growth.

    “If you have a job, it’s small comfort to know that the job market is strong if at the same time you feel like every paycheck is worth less and less anyway,” said pollster Kristen Soltis Anderson. “Inflation is such political poison because voters are reminded every day whenever they spend money that it is a problem we are experiencing.”

    As Biden tries to fend off fears that inflation is causing the country to slide into a recession, his chief evidence of the economy’s resilience is the continued job growth.

    “As we see the economy as a whole, we do not see it going into a recession,” White House press secretary Karine Jean-Pierre told reporters in anticipation of the latest jobs report.

    Going into the election, Biden and Democrats are already at a disadvantage. Voters generally favor the party out of the White House in midterms, giving Republicans an automatic leg up. When Yale University economist Ray Fair looked at past elections, his model forecast that Democrats would get just 46.4% of the national vote largely because Biden was in the Oval Office.

    Fair’s analysis suggests that inflation basically erased the political boost that Democrats could have gotten from strong economic growth during three quarters in 2021. Even if the economy is top of mind for many voters, the conflicting forces of past growth and high inflation cancel out each other.

    This makes the Democrats’ vote share roughly the same as suggested by the historical trend, Fair concluded.

    But inflation compounds the obstacles for a president who has tried to convey optimism as he tours the country in the run-up to the elections. Research in social psychology and behavioral economics generally shows that people often focus on the negatives and can block out the positives.

    “People pay more attention to bad news than to good news and are more likely to retain and recall bad news,” said Matthew Incantalupo, a political scientist at Yeshiva University.

    Incantalupo’s research looks at how voters absorb economic news. When unemployment is low, as it is now, he said, voters generally think about jobs as a personal issue — rather than a systemic one involving government policies. But most think about inflation as a social problem beyond any person’s control, unless that individual happens to run the Fed.

    “When it is high, everyone experiences it at least a little bit, and there really is no individual way to avoid it,” Incantalupo said. “Voters are going to look to government for remedies under those circumstances, and in many cases that will result in them punishing incumbents, even in the presence of other positive news about the economy.”

    Republican candidates have specifically said Biden’s $1.9 trillion coronavirus relief package last year overheated the economy, causing prices to rise alongside the job gains that they claim would have happened anyway as the pandemic receded. They have also said that Biden should have loosened restrictions on oil production, in order to increase domestic output and lower gasoline prices.

    House Republican leader Kevin McCarthy — who could become speaker if the GOP wins a House majority — has hammered Biden on high prices. As Biden has warned that Republicans who deny the outcome of the 2020 election are a threat to democracy, the California congressman countered that what voters care about are the costs of gas and groceries.

    “President Biden is trying to divide and deflect at a time when America needs to unite — because he can’t talk about his policies that have driven up the cost of living,” McCarthy tweeted this past week. “The American people aren’t buying it.”

    Still, inflation is not solely a domestic issue. After Russia invaded Ukraine, energy and food costs rose and suddenly flipped the global dynamics as inflation rose faster in parts of the world with less aggressive coronavirus relief than the U.S. Annual inflation in the euro zone is a record 10.7%, much higher than the 8.2% in the U.S.

    Meanwhile, growth has slowed in China, the pace of world trade is slipping and Saudi Arabia-led OPEC+ has cut oil production in order to prop up prices. And because the Fed is raising rates to lower domestic inflation, the dollar has increased in value and essentially exported higher prices to the rest of the world.

    This has left U.S. voters in the curious position of not necessarily blaming the president for inflation, even as they disapprove of his economic leadership.

    An October poll by AP-NORC Center for Public Affairs captured this split. More than half of voters say that prices are higher because of factors beyond Biden’s control. But just 36% approve of his economic leadership.

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  • Stocks end lower as hot jobs data signals aggressive Fed

    Stocks end lower as hot jobs data signals aggressive Fed

    NEW YORK — Stocks gave up early gains and ended lower on Wall Street after an unexpectedly strong report on the job market raised concerns that the Federal Reserve will need to keep the pressure on inflation with aggressive interest rate increases. Those high rates are intended to slow the economy, and the fear is the Fed may go too far and cause a recession. Several companies rose after reporting solid earnings or outlooks, including Pfizer and Uber. The S&P 500 fell 0.4% Tuesday. Long-term Treasury yields reversed course from an early slide and rose back near multiyear highs.

    THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

    Stocks on Wall Street gave up early gains and turned lower in afternoon trading Tuesday after an unexpectedly strong report on the job market raised concerns that the Federal Reserve will need to keep the pressure on inflation with aggressive interest rate increases.

    The S&P 500 fell 0.4% as of 3:31 p.m. Eastern. It had been up as much as 1% shortly after trading opened. The Dow Jones Industrial Average fell 72 points, or 0.2%, to 32,660 and the Nasdaq fell 0.8%.

    Big technology stocks were the biggest weights on the market. The companies, with their big valuations, have more heft in pushing the broader market up or down. Also, rising interest rates tend to make the sector look less attractive because of its those high valuations. Apple fell 1.6%.

    Small company stocks held up better than the rest of the market. The Russell 2000 rose 0.4%.

    The Labor Department reported that U.S. job openings rose unexpectedly in September, suggesting that the labor market is not cooling as fast as the Fed hoped for as it tries to slow economic growth.

    The latest jobs data, which comes ahead of a broader employment report on Friday, is disappointing for investors who are looking for signs that inflation is easing and that the Fed might consider tempering its interest rate increases.

    “That really fuels the expectation that the Fed has to do more hiking,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. “The labor market is still too tight for the Fed.”

    Wall Street is concerned that the central bank is being too aggressive in slowing the economy, running the risk that it could bring on a recession.

    Long-term Treasury yields turned higher after the report in job openings came out and rose back near multiyear highs. Those high rates have helped push mortgage rates above 7% this year.

    The yield on the 10-year Treasury rose to 4.06% from 3.93% earlier in the morning.

    The yield on the two-year Treasury, which tends to reflect market expectations of future moves by the Federal Reserve, rose to 4.53% from 4.40%.

    “The issue for investors is figuring out how long the hiking cycle will last,” Draho said. “(Fed Chair Jerome) Powell will want to leave all options on the table.”

    Stocks are coming off a strong rally in October that resulted in big monthly gains for some of the major indexes. Even so, they remain in the red for the year, including the S&P 500, which is down 19%.

    Several big companies made solid gains following encouraging earnings reports and forecasts.

    Pfizer rose 3.3% after reporting strong results and raising its profit forecast for the year. Uber surged 12.4% after giving investors a strong forecast for future bookings. Rival Lyft rose 4.5%.

    Earnings remain a big focus for investors this week. CVS reports its results on Wednesday and Starbucks reports earnings on Thursday.

    Outside of earnings, Abiomed surged 50.1% after health care giant Johnson & Johnson said it will pay $16.6 billion for the heart pump maker. Johnson & Johnson fell 0.1%.

    The Fed is beginning a two-day policy meeting that’s expected to result in its sixth interest rate increase of the year as the central bank fights the worst inflation in four decades. The widespread expectation is for the Fed to push through another increase that’s triple the usual size, or three-quarters of a percentage point.

    For its final policy meeting of the year, in December, opinions are currently split among investors as to whether the Fed will make another three-quarters point move or dial back to a half-point increase.

    “The big focus is not so much on what the rate hike is going to be, but really what the comments are coming out of this week’s meeting in terms of any indications of whether there’ll be a little bit of softening as we move into early next year,” said Greg Bassuk, CEO at AXS Investments.

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    AP Business writers Joe McDonald, Elaine Kurtenbach and Matt Ott contributed to this report.

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  • Wall Street heads for first weekly win streak since summer

    Wall Street heads for first weekly win streak since summer

    NEW YORK — Wall Street is rallying Friday, led by Apple, Exxon Mobil and other companies that made even bigger profits during the summer than expected.

    The S&P 500 was 1.2% higher in early trading and on pace to close out its first back-to-back weekly gains since August. The Dow Jones Industrial Average was up 533 points, or 1.7%, to 32,576, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.1% higher.

    Stocks have revived recently in part on hopes that the big hikes to interest rates shaking the market may be set to dial down later this year. Some investors are even talking again about a “pivot” by the Federal Reserve away from a focus solely on beating down inflation through rate hikes, even if many analysts say such hopes may be overstretched. More recently, many big U.S. companies have been reporting stronger earnings than expected, though the bag remains decidedly mixed.

    Apple rose 5% and was the strongest force lifting the S&P 500 in its first trading after reporting fatter revenue and profit than expected for the latest quarter. Oil producers were also strong after delivering record earnings on the back of rising crude prices. Exxon Mobil climbed 2.8%, and Chevron rose 2%.

    They helped to offset a 10.8% drop for Amazon, which offered a weaker-than-expected forecast for upcoming revenue. It was the latest in a lengthening list of discouraging trends for some of the Big Tech companies that have dominated Wall Street for years with their seemingly unstoppable growth.

    Earlier in the week, Meta Platforms lost nearly a quarter of its value after reporting a second straight quarter of revenue decline amid falling advertising sales and stiff competition from TikTok. Microsoft and Google’s parent company also reported weaker trends than Wall Street expected.

    Rising interest rates have hit Big Tech stock prices harder than the rest of the market, and the pressure increased Friday as yields climbed.

    Data released in the morning showed the raises that U.S. workers got in wages and other compensation during the summer was in line with economists’ expectations. That should keep the Fed on track to keep hiking rates sharply in hopes of weakening the job market enough to undercut the nation’s high inflation.

    The yield on the two-year Treasury, which tends to track expectations for Fed action, rose to 4.38% from 4.28% late Thursady.

    The 10-year yield, which helps set rates for mortgages and many other loans, climbed to 3.98% from 3.93% and was briefly back above 4%.

    Trading in Twitter’s stock has ended, after Elon Musk has taken control of the company following a lengthy legal battle.

    In Europe, stock indexes were mixed in relatively muted trading.

    Shares fell 0.9% in Tokyo even as the government approved a massive stimulus spending package to help the world’s No. 3 economy cope with inflation. As expected, the Bank of Japan wrapped up a policy meeting by keeping its ultra-lax monetary policy unchanged even as it forecast higher inflation.

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    Associated Press writers Elaine Kurtenbach, Matt Ott and Mari Yamaguchi contributed.

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