Tag: Stocks and bonds

Stock market today: Asian shares trade mixed as investors look ahead to economic data

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TOKYO — Asian shares were trading mixed Tuesday as investors looked ahead to a week that could see more swings in financial markets, including key reports on U.S. consumer confidence and the job market.

Japan’s benchmark Nikkei 225 reversed course and added 0.3% in afternoon trading to 30,796.81. Australia’s S&P/ASX 200 gained 0.1% to 6,780.70. South Korea’s Kospi lost 1.3% to 2,280.48. Hong Kong’s Hang Seng shed 1.0% to 17,059.78, while the Shanghai Composite declined 0.4% to 3,008.37.

Japan’s central bank changed its language on yields Tuesday, allowing the yields on its 10-year government bonds to increase above 1%, calling it “a reference point” instead of a more rigidly set cap.

“The Bank judges that it is appropriate to increase the flexibility in the conduct of yield curve control so that long-term interest rates will be formed smoothly in financial markets in response to future developments,” the Bank of Japan said in a statement.

At the end of its two-day policy meeting, the Bank of Japan maintained its monetary policy that takes a different track from the U.S. Federal Reserve and the world’s other major central banks, which have been tightening their monetary policies.

That has led to a dramatically weakening Japanese yen. Although a weak yen is a boon for Japan’s exporters, raising the value of its overseas earnings, an overly volatile currency is a minus for the economy overall and decreases Japan’s purchasing power.

The U.S. dollar has been trading at the upper 140-yen levels for some time, hitting 150 yen recently. In currency trading, the U.S. dollar rose to 150.16 Japanese yen from 149.04 yen. The euro cost $1.0595, down from $1.0619.

On Wall Street, the S&P 500 rose 49.45 points, or 1.2%, to close at 4,166.82 on Monday. It was the first trading after the benchmark index dropped more than 10% below its high point for the year.

The Dow Jones Industrial Average rose 511.37, or 1.6%, to 32,928.96 points. The Nasdaq composite rose 146.47, or 1.2%, to 12,789.48.

Apple will report its latest quarterly results Thursday. Because it’s the most valuable stock on Wall Street, it is also the most influential stock on the S&P 500. Already, sharp drops for Alphabet and other Big Tech members following their profit reports have shaken the market this reporting season.

Big Tech soared much more than the rest of the market early this year, which helped to lift the S&P 500 but also meant big expectations for continued growth. Those expectations perhaps grew too large.

The second big factor dragging on the stock market since its high point for the year on July 31 has been a sharp run higher in Treasury yields. When bonds are paying higher yields, investors have less appetite for pricey stocks and other investments. They also make borrowing more expensive for everyone from huge corporations to home buyers, which puts the brakes on the economy.

The yield on the 10-year Treasury rose to 4.89% from 4.84% late Friday. It jumped from less than 3.50% during the spring to more than 5% earlier this month, its highest level since 2007. A remarkably resilient economy and other factors have the 10-year Treasury yield catching up to the main interest rate controlled by the Fed, which is above 5.25% and at its highest level since 2001.

On Tuesday, the government will release data on employment costs from July through September. Workers have been fighting for higher raises, but the Fed worries that overly high pay increases could give inflation more fuel. Also, The Conference Board will release its consumer confidence index for October.

On Wednesday will come the latest monthly update on the number of job openings across the country. One way the Fed could pull off the delicate balancing act of slowing the economy without creating a recession would be if the number of job openings cools without requiring waves of layoffs.

Then on Friday will come the jobs report for October, which is typically one of the most anticipated pieces of economic data every month.

Through it all will be other updates on the economy and borrowing by the U.S. government, as well as profit reports from roughly 150 companies in the S&P 500, including CVS Health, Pfizer and Starbucks.

A barrel of U.S. crude jumped from less than $70 to more than $93 earlier this month. Oil prices have been shaky since the start of the latest Israel-Hamas war. Traders are still uncertain about whether the fighting will spill into the politics around the region and affect production from Iran or other big suppliers.

Benchmark U.S. crude added 42 cents to $82.73 a barrel. It fell 3.8% Monday to $82.31. Brent crude, the international standard, rose 36 cents to $87.81 per barrel.

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AP Writers Stan Choe and Damian J. Troise contributed.

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October 31, 2023
Stock market today: Asian shares slip after S&P 500 slips ahead of Fed interest rate decision

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HONG KONG — Asian shares were mostly lower on Monday ahead of a Federal Reserve decision this week on interest rates.

U.S. futures gained while oil prices fell more than $1 a barrel. as concerns over an escalation of the Israel-Hamas war added to uncertainty over supplies.

The Israeli military’s ground forces conducted incursions into Gaza over the weekend and Prime Minister Netanyahu warned of a “long and difficult” war.

A mixed set of economic reports Friday didn’t appear to change Wall Street’s expectations that the Federal Reserve will keep its benchmark rate of above 5.25% unchanged at a meeting Wednesday.

A report showed that the Fed’s preferred measure of inflation remained high last month, but within economists’ expectations. Spending by U.S. consumers was stronger than expected, even though growth in their incomes fell short of forecasts.

U.S. consumer expectations for inflation in the coming year are rising, up to 4.2% from 3.2% last month. That’s particularly concerning for the Fed, which fears such expectations could lead to a vicious cycle that worsens high inflation.

In Asian markets Monday, Tokyo’s Nikkei 225 index lost 1.3% to 30,591.03. There is speculation, given recent signs of sustained inflation, that the Bank of Japan may make adjustments to its monetary policy in a meeting that ends on Tuesday.

Over the weekend, more than 30 companies listed in China revealed intentions to conduct share buybacks and purchases after China announced a slew of measures aimed at stabilizing falling stock prices. The Hang Seng in Hong Kong fell 0.3% to 17,349.36 and the Shanghai Composite index rose 0.2% at 3,022.90.

Nominal retail sales in Australia rose 0.9% in September from August, data from the Australian Bureau of Statistics showed on Monday. This is the fastest pace in eight months, suggesting some resilience in consumer spending. Australia’s S&P/ASX 200 slipped 0.6% to 6,787.90.

South Korea’s Kospi added 0.4% to 2,311.55. Taiwan’s Taiex edged up 0.1% and the SET in Bangkok also was up 0.1%.

Stocks stumbled Friday on Wall Street. The S&P 500 fell 0.5%, 10% below the peak it reached in July.

That put benchmark index into what’s called a “correction.” Stocks have fallen the past three months as investors face the reality of higher interest rates, with Federal Reserve officials talking about keeping rates “higher for longer.”

The Dow Jones Industrial Average fell 1.1% and the Russell 2000 index of smaller company stocks slipped 1.2%, closing at its lowest level in about four years.

The Nasdaq was the bright spot in the market, gaining ground on the strength of several big technology and communications companies that reported solid earnings. The index rose 0.4%.

Amazon rose 6.8% following its profit report. Both its profit and revenue for the summer were better than expected. As one of the most massive companies on Wall Street, Amazon’s stock movements carry huge weight on the S&P 500 and other indexes.

It’s one of the “Magnificent Seven” Big Tech stocks responsible for much of the market’s climb early this year. But those huge gains also meant big expectations: Alphabet, Meta and Tesla all fell sharply following their latest reports.

Intel, which is outside the Magnificent Seven, was also helping to support the market. It rose 9.3% after reporting much stronger profit for the summer than analysts expected.

Ford stumbled 12.2% after reporting disappointing earnings and revenue a day after it reached a tentative contract agreement with the United Auto Workers union.

The yield on the 10-year Treasury has been hovering at levels not seen since 2007. Early Monday it was at 4.87%. Its rise from less than 3.50% in the spring to more than 5% earlier last week has sent prices tumbling for older bonds already trading in the market.

The 10-year yield has been catching up the Fed’s main overnight interest rate as the economy remains remarkably solid and as worries rise about how much debt the U.S. government is taking on to pay for its spending.

A barrel of benchmark U.S. oil fell $1.32 to $84.22 a barrel in electronic trading on the New York Mercantile Exchange. It slipped 99 cents to settle at $84.54 on Friday. Brent crude, the international standard, slipped $1.12 to $88.08 per barrel.

In currency trading, the U.S. dollar fell to 149.56 Japanese yen from 149.59 yen. The euro cost $1.0563, falling from $1.0567 late Friday.

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October 29, 2023
How major US stock indexes fared Friday, 10/27/2023

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Stocks closed lower on Wall Street, pulling the S&P 500 down 10% from the peak it reached in July

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October 27, 2023
Stocks drop again on Wall Street, pulling the S&P 500 index 10% below the peak it reached in July

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Stocks drop again on Wall Street, pulling the S&P 500 index 10% below the peak it reached in July

ByThe Associated Press

October 27, 2023, 4:02 PM

NEW YORK — Stocks drop again on Wall Street, pulling the S&P 500 index 10% below the peak it reached in July.

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October 27, 2023
Stock market today: Asian shares rebound following latest tumble on Wall Street. Oil prices gain $1

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HONG KONG — Asian shares advanced Friday after the latest tumble on Wall Street, where the S&P 500 fell to its lowest level in five months.

U.S. futures gained and oil prices were more than $1 higher as the Israeli military said its troops and tanks had briefly entered northern Gaza.

Japan’s Nikkei 225 index gained 1.1% to 30,948.49 as an unexpectedly high reading for consumer inflation in Tokyo raised hopes the central bank might finally end its longstanding near-zero interest rate policy.

Tokyo core consumer inflation, which excludes volatile fresh food prices, rose 2.7% in October, the Statistics Bureau reported Friday. As a leading indicator of nationwide trends, it suggests a broader trend of rising prices.

Chinese shares also halted their recent slide as the government reported that profits at China’s industrial firms extended gains for a second month in September, rising nearly 12%, following policy measures to help stabilize the slowing economy.

Industrial profits rose 17.2% in August in the first expansion in more than a year.

The Hang Seng in Hong Kong rose 2.1% to 17,403.03, setting the market up for a winning week, and the Shanghai Composite index added 1.1% to 3,019.72.

The Kospi in Seoul gained 0.2% to 2,302.81. Australia’s S&P/ASX 200 was up 0.2% to 6,826.90. Taiwan’s Taiex was 0.4% higher and Bangkok’s SET was nearly flat.

Wall Street retreated Thursday, dropping nearly 10% below its high mark for the year, after big-name companies warned an uncertain global economy may hurt their profits.

The S&P 500 fell 1.2% for its ninth drop in 11 days, closing at 4,137.23. Another steep fall for Big Tech dragged the Nasdaq composite down 1.8% to 12.595.61. The Dow Jones Industrial Average sank 0.8% to 32,784.30.

Meta Platforms was among the market’s heaviest weights, sinking 3.7% even though the parent company of Facebook and Instagram reported fatter profit and revenue for the summer than analysts expected.

Investors may have been spooked by the company’s warning that it’s seen some initial softness in advertising due to the latest Israel-Hamas war, and analysts said the company gave a wider range than it has in the past for its forecast of upcoming revenue.

The yield on the 10-year Treasury fell to 4.85%, from 4.96% late Wednesday, after reports showed the U.S. economy continues to storm ahead despite much higher interest rates that have already lashed the stock market.

A preliminary estimate suggested the U.S. economy’s growth accelerated during the summer to 4.9%. That was more than economists expected. A separate report indicated the U.S. job market remains remarkably solid, with relatively few layoffs across the country.

Thursday’s reports showed the U.S. economy clearly is not in a recession. But investors are more concerned about what will happen rather than what has passed, and worry that a solid economy could continue to push prices higher. That could push the Fed to keep rates high for a long time to curb inflation.

Higher interest rates could mean eventual weakness for the economy and corporate profits. And high bond yields make investors less willing to pay high prices for stocks and other investments.

Treasury yields have spurted higher as they catch up with the main interest rate controlled by the Federal Reserve, which is at its highest level since 2001.

In the near term, traders overwhelmingly expect the Federal Reserve to hold rates steady at its next meeting, which ends Wednesday. That would mark a second straight meeting where the Fed did not hike its main interest rate, which it has pulled above 5.25% from nearly zero early last year.

Even better-than-expected profits from big U.S. companies haven’t been enough to arrest Wall Street’s recent slide.

The majority of companies in the S&P 500 have been topping analysts’ profit expectations for the summer, and the hope is that they’ll report their first overall growth in a year. But several big-name companies fell Thursday following disappointing results or forecasts for upcoming trends.

In other trading Friday, U.S. benchmark crude gained $1.34 to $84.55 a barrel in electronic trading on the New York Mercantile Exchange. It gave up $2.18 on Thursday.

Brent crude, the international standard, added $1.26 to $88.31 a barrel. It shed $2.07 on Thursday.

The dollar fell to 150.24 Japanese yen from 150.39 yen. The euro fell to $1.0559 from $1.0565.

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October 27, 2023
The yield on a 10-year Treasury reached 5% for the 1st time since 2007. Here’s why that matters

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NEW YORK — The yield on the 10-year Treasury has reached 5% for the first time since 2007. That matters for everyone, not just Wall Street.

Treasury yields have been climbing rapidly, with the 10-year yield rallying from less than 3.50% during the spring and from just 0.50% early in the pandemic. Monday morning, the yield on the 10-year Treasury was at 4.96% after hitting 5.02% earlier. The jump means the U.S. government must pay more to borrow money from investors to cover its spending.

It also directly affects people around the world, because the 10-year Treasury yield is the centerpiece of the global financial system and helps set prices for all kinds of other loans and investments. Besides making it more expensive for U.S. homebuyers to buy a house with a mortgage, higher yields also put downward pressure on prices for everything from stocks to cryptocurrencies. Eventually, they could help cause companies to lay off more workers.

Higher yields mark a sharp turnaround for a generation of consumers and investors who have known pretty much just low yields, as central banks kept benchmark interest rates pinned at nearly zero. Such low rates let people borrow money more easily, which helped economies to strengthen following the 2008 financial crisis, the European debt crisis and other maladies including, most recently, the COVID-19 pandemic.

The low rates led to rising prices for houses, stocks and other investments, but they may also have encouraged too much risk-taking and spurred investment bubbles.

Now, central banks are more concerned with getting high inflation under control. To do that, they raise interest rates and hope the higher costs to borrow will starve inflation of its fuel by bringing down spending.

The Fed’s main interest rate affects extremely short-term loans, those that banks charge overnight. The Fed has already pulled its federal funds rate to the highest level since 2001, and it’s debating whether to hike it one more time. Either way, it’s signaled plans to keep rates high for a while to successfully suffocate inflation.

The 10-year Treasury yield has been catching up to the Fed’s main interest rate after a string of reports has shown the U.S. economy remains remarkably resilient. While that calms worries about a possible recession caused by high rates, it could also keep upward pressure on inflation and shorter-term rates.

Federal Reserve Chair Jerome Powell said Thursday that many other factors could be contributing to the swift rise in the 10-year Treasury yield. They include the U.S. government’s big deficits, which require more federal borrowing, and the Fed’s ongoing efforts to reduce its trove of bond investments built earlier to keep yields low.

On the wonkier side, bond prices have also been falling in tandem with stock prices more often than they used to. That’s unnerving for investors who usually see bonds as the safer part of their portfolios, and it could be pushing them to demand higher yields to own them.

The rise in the 10-year Treasury yield most directly means the U.S. government has to pay more to borrow money for 10 years. But because the 10-year yield is the reference point for financial markets, it also quickly filters out into all kinds of loans.

Even for companies with the best credit ratings, the interest rates they borrow at are set by adding some extra on top of whatever the U.S. government is paying for its Treasurys. Borrowers with worse credit ratings have to pay more extra than those seen as good bets to repay their debts.

More expensive borrowing keep U.S. households from spending as much and companies from expanding as much, which should eventually hit overall U.S. economic activity.

More immediately, because a 10-year Treasury is seen as one of the safest possible investments on the planet, its yield swiftly sways prices for all kinds of investments.

When a super-safe Treasury is paying much more in interest, investors feel less need to pay high prices for a Big Tech stocks, cryptocurrency or other investment that carries more risk. It’s a big reason the S&P 500 has seen its gain for the year so far tumble from 19.5% at the end of July to 10% as of Friday.

Higher U.S. yields also attract more investments from abroad, which means investors are increasingly swapping their currencies for U.S. dollars. Since the end of July, the U.S. dollar has climbed roughly 4% against the euro, 5% against the British pound and 6% against the Australian dollar.

While a stronger dollar helps U.S. tourists buy more stuff when they’re abroad, it can also add financial pressure and heighten inflation for other countries, particularly in the developing world.

Even for U.S. bond investors, the swift rise in bond yields has brought losses of their own. When new bonds are paying higher yields, it makes the older, lower-yielding bonds already sitting in investors’ portfolios or mutual funds less attractive and knocks down their price.

The largest U.S. bond mutual fund has lost roughly 3% so far in 2023 and is on track for a third straight yearly loss. That’s never happened since its birth in 1987.

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October 23, 2023
Stock market today: Asian stocks fall as concerns rise over Israel-Hamas war and high yields

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HONG KONG — Asian shares were lower on Monday as higher risks of broader conflict in the Middle East clouded market sentiment and bond yields further pressured stocks.

U.S. futures rose while oil prices fell back.

Israel announced its intention on Saturday to step up its attacks on the Gaza Strip in preparation for the next stage of its war on Hamas. Israel’s military spokesman has urged residents of Gaza City to head south in order to ensure their safety.

A barrel of benchmark U.S. oil fell 80 cents to $87.30. It has been bouncing around since the latest Hamas-Israel war began, after leaping from $70 to more than $93 during the summer. It slipped 62 cents to settle at $88.75 on Friday. Brent crude, the international standard, slipped 64 cents to $91.52 per barrel.

Chinese stocks fell to a 1-year low early Monday as foreign investors sold off holdings. The Shanghai Composite index was down 1%, at 2,954.42. Hong Kong’s markets were closed for a holiday, as were Thailand’s.

International investors have been shifting their assets out of Chinese shares due to escalating geopolitical tensions, challenging economic conditions, and a crisis in the property industry.

Taiwan’s Taiex was 0.9% lower.

Shares in Taiwan-based Foxconn Technology Co., a Fortune 500 company known globally for making Apple iPhones, fell 1.7% after Chinese state media reported over the weekend that the company has been subjected to searches by Chinese tax authorities.

Tokyo’s Nikkei 225 index lost 0.8% to 31,007.12 and the Kospi in Seoul lost 0.5% to 2,363.67. Australia’s S&P/ASX 200 sank 1% to 6,837.70.

India’s Sensex edged less than 0.1% higher.

On Friday, Wall Street racked up more losses to close out its worst week in a month. The S&P 500 fell 1.3% for a fourth straight drop to 4,224.16. The Dow sank 0.9% to 33,127.28 and the Nasdaq composite tumbled 1.5% to 12,983.81.

The stock market has been struggling under the weight of the bond market, where the yield on the 10-year Treasury briefly topped 5% late Thursday for the first time since 2007, according to Tradeweb. High yields make borrowing more expensive for everyone, and they slow the economy while dragging on prices for stocks and other investments.

“Indeed, the trajectory of U.S. Treasurys is not merely a question; it is the only question for financial markets,” Stephen Innes of SPI Asset Management said in a commentary. “U.S. government bonds are the critical benchmark reference point against which virtually all other global assets are ultimately priced off.”

The yield on the 10-year Treasury was hanging within a hair of 5% early Friday morning. It’s been generally catching up to the Federal Reserve’s main interest rate, which is already above 5.25% — its highest level since 2001.

The Fed raised its overnight interest rate rapidly hoping to quash high inflation, which has come down from its peak last summer. But higher oil prices threaten to add upward pressure.

SolarEdge tumbled 27.3% Friday after the solar technology company slashed its sales and profit expectations for the current quarter. The company blamed order cancellations in Europe due in part to slower-than-expected installation rates.

Other solar stocks also fell, including a 14.7% drop for Enphase Energy.

Regions Financial sank 12.4% after it reported weaker profit than expected for the latest quarter. Focus has been on the banking industry outside its biggest titans. It was under heavy pressure earlier this year after high interest rates helped cause three high-profile collapses of U.S. banks.

Other regional banks were also weaker. Comerica fell 8.5% despite reporting better profit for the summer than expected. Huntington Bancshares sank 3.9% after likewise topping earnings forecasts.

SLB, the giant oilfield services provider, fell 2.9% despite reporting stronger profit than expected for the summer. Its revenue fell just shy of analysts’ expectations.

On the winning side of Wall Street was Knight-Swift Transportation. The trucking company jumped 11.7% after reporting stronger profit for the latest quarter than expected.

In currency trading, the U.S. dollar rose to 149.94 Japanese yen from 149.87 yen. The euro cost $1.0577, falling from $1.0600 late Friday.

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October 23, 2023
Stock market today: Asian stocks fall as concerns rise over Israel-Hamas war and high yields

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HONG KONG — Asian shares were lower on Monday as higher risks of broader conflict in the Middle East clouded market sentiment and bond yields further pressured stocks.

U.S. futures rose while oil prices fell back.

Israel announced its intention on Saturday to step up its attacks on the Gaza Strip in preparation for the next stage of its war on Hamas. Israel’s military spokesman has urged residents of Gaza City to head south in order to ensure their safety.

A barrel of benchmark U.S. oil fell 80 cents to $87.30. It has been bouncing around since the latest Hamas-Israel war began, after leaping from $70 to more than $93 during the summer. It slipped 62 cents to settle at $88.75 on Friday. Brent crude, the international standard, slipped 64 cents to $91.52 per barrel.

Chinese stocks fell to a 1-year low early Monday as foreign investors sold off holdings. The Shanghai Composite index was down 1%, at 2,954.42. Hong Kong’s markets were closed for a holiday, as were Thailand’s.

International investors have been shifting their assets out of Chinese shares due to escalating geopolitical tensions, challenging economic conditions, and a crisis in the property industry.

Taiwan’s Taiex was 0.9% lower.

Shares in Taiwan-based Foxconn Technology Co., a Fortune 500 company known globally for making Apple iPhones, fell 1.7% after Chinese state media reported over the weekend that the company has been subjected to searches by Chinese tax authorities.

Tokyo’s Nikkei 225 index lost 0.8% to 31,007.12 and the Kospi in Seoul lost 0.5% to 2,363.67. Australia’s S&P/ASX 200 sank 1% to 6,837.70.

India’s Sensex edged less than 0.1% higher.

On Friday, Wall Street racked up more losses to close out its worst week in a month. The S&P 500 fell 1.3% for a fourth straight drop to 4,224.16. The Dow sank 0.9% to 33,127.28 and the Nasdaq composite tumbled 1.5% to 12,983.81.

The stock market has been struggling under the weight of the bond market, where the yield on the 10-year Treasury briefly topped 5% late Thursday for the first time since 2007, according to Tradeweb. High yields make borrowing more expensive for everyone, and they slow the economy while dragging on prices for stocks and other investments.

“Indeed, the trajectory of U.S. Treasurys is not merely a question; it is the only question for financial markets,” Stephen Innes of SPI Asset Management said in a commentary. “U.S. government bonds are the critical benchmark reference point against which virtually all other global assets are ultimately priced off.”

The yield on the 10-year Treasury was hanging within a hair of 5% early Friday morning. It’s been generally catching up to the Federal Reserve’s main interest rate, which is already above 5.25% — its highest level since 2001.

The Fed raised its overnight interest rate rapidly hoping to quash high inflation, which has come down from its peak last summer. But higher oil prices threaten to add upward pressure.

SolarEdge tumbled 27.3% Friday after the solar technology company slashed its sales and profit expectations for the current quarter. The company blamed order cancellations in Europe due in part to slower-than-expected installation rates.

Other solar stocks also fell, including a 14.7% drop for Enphase Energy.

Regions Financial sank 12.4% after it reported weaker profit than expected for the latest quarter. Focus has been on the banking industry outside its biggest titans. It was under heavy pressure earlier this year after high interest rates helped cause three high-profile collapses of U.S. banks.

Other regional banks were also weaker. Comerica fell 8.5% despite reporting better profit for the summer than expected. Huntington Bancshares sank 3.9% after likewise topping earnings forecasts.

SLB, the giant oilfield services provider, fell 2.9% despite reporting stronger profit than expected for the summer. Its revenue fell just shy of analysts’ expectations.

On the winning side of Wall Street was Knight-Swift Transportation. The trucking company jumped 11.7% after reporting stronger profit for the latest quarter than expected.

In currency trading, the U.S. dollar rose to 149.94 Japanese yen from 149.87 yen. The euro cost $1.0577, falling from $1.0600 late Friday.

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October 22, 2023
Stock market today: Asian shares follow Wall Street lower, and Japan reports September exports rose

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BANGKOK — Shares tumbled in Asia on Thursday following a retreat on Wall Street after big U.S. companies delivered mixed profit reports and Treasury yields added pressure on stocks.

Worries about war in the Middle East also are dragging on markets.

Benchmarks in Hong Kong, Tokyo and Seoul fell about 2%.

Japan reported its exports swung into positive territory in September as vehicle shipments surged.

Exports rose 4.3% while imports sank 16.3% in September and the trade balance swung to a surplus of 62.4 trillion yen ($410 billion). Exports to the U.S. were up 13% while those to the rest of Asia declined 4.3%.

Imports fell as the price of oil moderated for a short time before surging once again with the start of fighting following the Oct. 7 surprise attack by the militant group Hamas on Israel.

Tokyo’s Nikkei 225 index lost 1.9% to 31,430.62. The Kospi in Seoul lost 1.9% to 2,415.80 as the Bank of Korea left its key interest rate unchanged.

Hong Kong’s Hang Seng index declined 2.2% to 17,349.79 and the Shanghai Composite index was down 1.6%, at 3,010.03. Australia’s S&P/ASX 200 sank 1.4% to 6,981.60.

India’s Sensex was 0.2% lower and Bangkok’s SET fell 0.9%.

“Another surge in Treasury yields, lingering geopolitical tensions in the Middle East and higher oil prices seem to dampen appetite in risk-taking for now,” Yeap Jun Rong of IG said in a report.

A big threat for the global economy is what oil prices will do to inflation. Crude prices jumped sharply on Wednesday following a deadly explosion at a hospital in the Gaza Strip, which sparked protests across the Middle East.

Early Thursday, U.S. benchmark crude oil was down 11 cents at $87.16 per barrel in electronic trading on the New York Mercantile Exchange. It had surged $1.83 on Wednesday to $87.27 per barrel.

Brent crude, the international pricing standard, fell 28 cents to $91.22 per barrel. It climbed $1.60 on Wednesday.

On Wednesday, the S&P 500 sank 1.3% and the Dow Jones Industrial Average lost 1%. The Nasdaq sank 1.6%.

Tesla’s share price fell 4.2% in afterhours trading after it reported its net income slumped in the third quarter, as price reductions helped drive strong sales growth but ate into the automaker’s profit margins.

Shares in Netflix jumped 12.8% in afterhours trading after it disclosed summertime subscriber gains that surpassed analysts’ projections, signaling the video streaming service’s password sharing crackdown is converting freeloaders into paying customers.

United Airlines slumped 9.7% after it said surging fuel prices and the suspension of flights to Tel Aviv will take a toll on its business. Other airlines fell in concert, with American Airlines down 4.9% and Delta Air Lines down 4.4%.

Morgan Stanley tumbled 6.8% as investors focused on a weaker-than-expected showing by the company’s wealth management business, analysts said.

On the winning side was Procter & Gamble, the giant behind such brands as Charmin, Febreze and Oral-B. It rose 2.6% after reporting stronger profit than expected for the latest quarter as its revenue rose after it hiked prices.

The earnings reporting season for the summer is just starting and the broad expectation is for S&P 500 companies’ overall earnings per share to have climbed in the last quarter for the first time in a year.

The yield on the 10-year Treasury surged to 4.97% early Thursday after topping 4.90% Wednesday for the first time since 2007, just before the global financial crisis. It was at 4.84% late Tuesday and in the spring was at less than 3.50%.

The sharp jump in yields followed a report by the Treasury Department showing Chinese investors sold off the most U.S. bonds and stocks in four years in August.

Yields have climbed as the U.S. economy has remained remarkably resilient, even after the Federal Reserve raised its main interest rate to the highest level since 2001. High rates and yields hurt prices for stocks and other investments.

In other trading early Thursday, the dollar fell to 149.80 Japanese yen from 149.93 yen. The euro rose to $1.0539 from $1.0536.

Gold lost $10.30 to $1,958.00 per ounce early Thursday. It rose $32.60 to settle at $1,968.30 per ounce a day earlier as investors sought safer investments.

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October 19, 2023
Shares of United Airlines tumble on sour outlook for 4Q profit because of rising fuel prices

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Shares of United Airlines have tumbled after the carrier issued a gloomy outlook for fourth-quarter profit

ByThe Associated Press

October 18, 2023, 10:23 AM

FILE – In this July 2, 2021 file photo, a United Airlines jetliner taxis down a runway for take off from Denver International Airport in Denver. United Airlines reports earnings on Tuesday, Oct. 17, 2023. (AP Photo/David Zalubowski, file)

The Associated Press

Shares of United Airlines tumbled 9.7% on Wednesday after the carrier gave a gloomy outlook for its fourth-quarter profit, which will be reduced by rising jet fuel prices.

In addition, United’s revenue could be under pressure the longer that flights to Israel are suspended for the Israel-Hamas war.

United’s stock suffered its biggest one-day percentage decline since July 2022. Other U.S. airline stocks also fell.

United reported after the market closed Tuesday that it earned $1.14 billion in the third quarter, beating Wall Street expectations for profit and revenue.

Investors, however, focused immediately on the airline’s prediction that fourth-quarter earnings would be between $1.50 and $1.80 per share, well below analysts’ forecast of $2.09 per share.

United said whether profit is at the high or low end of that range will depend on whether flights to Tel Aviv resume next month or remain shuttered through year end.

“Given the projections that this will be a long war, we are looking at the lower end of the forecast range and assuming no service until at least year-end,” Cowen analyst Helane Becker wrote in a note to clients.

Becker called United’s fourth-quarter outlook “bleak and worse than our estimates.”

United was flying to Tel Aviv from San Francisco, Washington, and Newark, New Jersey — more service to Israel than offered by Delta Air Lines or American Airlines. All three suspended their service shortly after Hamas militants attacked Israel on Oct. 7.

Other airline stocks also fell Wednesday. Delta Air Lines ended down 4.4%, American lost almost 5% and Southwest finished 4.2% lower.

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October 18, 2023
Stock market today: Wall Street falls following profit reports, and oil prices jump on war worries

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NEW YORK — Wall Street is falling Wednesday following a mixed set of profit reports from big U.S. companies. Worries about war in the Middle East are also dragging on the market.

The S&P 500 was 1% lower in afternoon trading. The Dow Jones Industrial Average was down 248 points, or 0.7%, as of 12:54 p.m. Eastern time, and the Nasdaq composite was 1.2% lower.

Crude oil prices jumped sharply overnight following a deadly explosion at a hospital in the Gaza Strip, which sparked protests across the Middle East. But oil prices pared their gains as the morning progressed. Gold, meanwhile, rose as investors continue to look for safer investments following the Oct. 7 surprise attack on Israel by Hamas.

On Wall Street, United Airlines slumped 8.1% after it showed how big a hit to profits it may take because of surging fuel prices and the suspension of flights to Tel Aviv. It gave a profit forecast for the last three months of the year that fell well short of analysts’ expectations.

The forecast overshadowed United’s reporting a bigger profit for the summer than Wall Street had predicted. Other airlines fell in concert, with American Airlines down 4.7% and Delta Air Lines down 4.3%.

Morgan Stanley also tumbled, down 7.7%, even though it likewise reported a bigger profit for the latest quarter than analysts expected. Investors focused on a weaker-than-expected showing by the company’s wealth management business, analysts said.

On the winning side of Wall Street was Procter & Gamble, the giant behind such brands as Charmin, Febreze and Oral-B. It rose 1.8% after reporting stronger profit than expected for the latest quarter. Its revenue rose after it increased prices for its products.

Nasdaq rose 4.3% for one of the stock market‘s bigger gains after it reported stronger profit for the latest quarter than expected. It benefited from high-profile stock debuts on its trading exchange, as well as growth for its anti-financial crime business.

The earnings reporting season for the summer is still in its early days, and the broad expectation is for S&P 500 companies to say their overall earnings per share rose last quarter for the first time in a year.

Such growth in profits are essential for the stock market to keep rising, particularly when the other big factor that drives stock prices is pushing the other way.

Treasury yields in the bond market have been on a steady march higher as investors accept a new normal where the Federal Reserve is likely to keep interest rates high to get inflation under control. High rates and yields hurt prices for stocks and other investments.

The yield on the 10-year Treasury rose to 4.91% from 4.84% late Tuesday and from less than 3.50% during the summer.

Yields have climbed as the U.S. economy has remained remarkably resilient, even after the Federal Reserve raised its main interest rate to the highest level since 2001. That strength has a large group of investors believing the Fed may pull off the balancing act of slowing the economy through high rates just enough to smother high inflation but not so much as to cause a painful recession.

Still, investors remain cautious. Global fund managers are holding more cash to protect themselves, up to 5.3% of their total portfolios in October from 4.9%, according to the latest survey by Bank of America.

A big threat for the global economy is what oil prices do to inflation amid the latest war between Hamas and Israel.

In the oil market, a barrel of U.S. crude approached $90 early in the morning before paring its gain. It was up 2% at $88.36 per barrel. Brent crude, the international standard, was 1.7% higher at $91.47 after earlier nearing $93 per barrel.

The spark for the jump was a blast at a Gaza hospital that reportedly killed hundreds. Hamas blamed it on an Israeli airstrike, while the Israeli military blamed a rocket misfired by members of another Palestinian militant group. President Joe Biden seemed to suggest it wasn’t Israel.

The fear in financial markets is that the war will draw in big oil-producing nations, such as Iran, and lead to disruptions of supply.

Iranian Foreign Minister Hossein Amirabdollahian called on Muslim nations Wednesday to expel their Israeli ambassadors and launch an oil embargo on Israel after the explosion at the hospital.

Gold rose 1.4% to $1,962.90 per ounce as investors looked for safer things to own.

In stock markets abroad, indexes were lower in much of Europe after ending mixed in Asia.

China reported Wednesday that its economy grew at a 4.9% annual pace from July through September. That’s down from 6.3% growth in the previous quarter but better than economists feared for the world’s second-largest economy.

___

AP Business Writers Matt Ott, Elaine Kurtenbach and Zen Soo contributed.

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October 18, 2023
Stock market today: Asian shares sink as investors brace for Israeli invasion of Gaza

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NEW YORK — Shares fell in Asia as investors braced Monday for an expected invasion by Israel in the Gaza Strip.

U.S. futures edged higher while oil prices were little changed.

Israeli forces, supported by a growing deployment of U.S. warships in the region and the call-up of some 360,000 reservists, have positioned themselves along Gaza’s border and drilled for what Israel said would be a broad campaign to dismantle the militant group.

More than a million people have fled their homes in the besieged enclave in the past week, ahead of the expected invasion meant to eliminate Hamas’ leadership after its deadly Oct. 7 attack.

“Who can blame markets for being jittery,” RaboResearch Global Economics and Markets said in a commentary. “The world now holds its breath as Israel prepares for a full-scale ground invasion of Gaza, with only unseasonal torrential rain delaying the seemingly inevitable.”

The conflict has jolted oil markets, adding to uncertainties already hanging over the global economic outlook. The Gaza region is not a major producer of oil, but the fear is that the violence could spill into the politics around the crude market and eventually lead to disruptions in the flow of petroleum, with broad ramifications for many industries.

On Friday, the price of a barrel of benchmark U.S. crude oil jumped $4.78 to settle at $87.69. Brent crude, the international standard, climbed $4.89 to $90.89 per barrel. Early Monday, U.S. crude oil was unchanged while Brent was up 3 cents at $90.92 a barrel.

In Asian share trading, Tokyo’s Nikkei 225 sank 1.9% to 31,695.15 and the Hang Seng in Hong Kong lost 0.5% to 17,728.35. South Korea’s Kospi declined 1% to 2,431.28.

The Shanghai Composite index was 0.4% lower, at 3,075.38, while Bangkok’s SET skidded 2.1%. Australia’s S&P/ASX 200 was down 0.4% at 7,030.10.

On Friday, U.S. stocks mostly fell as they were buffeted by competing waves of optimism and fear.

The S&P 500 slipped 0.5% to 4,327.78 and the Nasdaq composite fell 1.2% to 13,407.23. The Dow industrials edged up 0.1% to 33,670.29.

Oil prices leaped, and Treasury yields fell after Israel’s military ordered the evacuation of northern Gaza ahead of a possible ground invasion, according to the United Nations, which warned of potentially “devastating humanitarian consequences.”

But several U.S. banking giants at the same time said their profits during the summer were better than feared, which offered hope on Wall Street for an earning reporting season that may deliver the first growth for big companies in a year.

Worries about the war pulled Treasury yields lower, which often happens when investors head for safer investments during times of stress. The yield on the 10-year Treasury fell to 4.63% from 4.70% late Thursday.

Yields also eased after another official at the Federal Reserve said the central bank may be done hiking its main interest rate following a blistering campaign that began early last year.

Helping to support Wall Street were JPMorgan Chase and Wells Fargo, which reported stronger profit for the summer quarter than analysts expected.

JPMorgan Chase rose 1.5% after its profit for the third quarter climbed 35% from a year earlier. It benefited from a rise in interest rates, but its CEO Jamie Dimon also warned that “this may be the most dangerous time the world has seen in decades.”

Wells Fargo rose 3.1% after it likewise topped analysts’ expectations for profit during the summer quarter.

UnitedHealth Group beat Wall Street’s profit expectations, and its stock climbed 2.6%.

Dollar General jumped to the biggest gain in the S&P 500, up 9.2%, after it said Todd Vasos will be returning as CEO.

In currency dealings early Monday, the U.S. dollar fell to 149.39 Japanese yen from 149.55 yen. The euro rose to $1.0529 from $1.0515.

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October 15, 2023
Stock market today: Asian shares rise with eyes on prices, war in the Middle East

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TOKYO — Asian shares mostly rose Thursday as investors awaited the release of U.S. consumer price data and kept a cautious watch on the war between Israel and the Palestinian militant group Hamas.

Japan’s benchmark Nikkei 225 jumped 1.8% to finish at 32,494.66. Sydney’s S&P/ASX 200 inched up less than 0.1% to 7,091.00. South Korea’s Kospi added 1.1% to 2,477.54. Hong Kong’s Hang Seng surged 2.2% to 18,283.66, while the Shanghai Composite rose 0.9% to 3,106.21.

“Recent remarks from FOMC members have leaned dovish, suggesting that the Fed might maintain current short-term rates,” Anderson Alves at ActivTrades said in a report, referring to the U.S. Federal Reserve’s action on interest rates.

Tensions in the Middle East are under the spotlight, with a possible escalation if nations like Lebanon or Iran are drawn in, which would set off significant movement in U.S. Treasuries, he said.

On Wall Street, the S&P 500 rose 0.4% to 4,376.95 for its fourth straight gain. The Dow Jones Industrial Average added 0.2% to 33,804.87, and the Nasdaq composite gained 0.7% to 13,659.68. All three indexes moved between small gains and losses through the day.

Wall Street has been mostly struggling since the summer as longer-term yields shoot higher in the bond market, weighing on prices for all kinds of investments. Some relief has come this week, and yields have eased after officials at the Federal Reserve suggested they may be done raising their main overnight interest rate.

The yield on the 10-year Treasury fell to 4.57% from 4.66% late Tuesday and from more than 4.80% last week, when it reached its highest level since 2007. Besides hurting prices for investments, high yields have jacked up rates for mortgages and other loans, which saps momentum from the economy.

The stock market got a boost from that drop in longer-term yields, but it also felt a drag from rising shorter-term yields. The two-year Treasury yield, which moves more closely with expectations for the Fed, ticked up to 4.99% from 4.97%.

Yields were mixed after a report showed inflation at the wholesale level was stronger last month than economists expected. A report showing how much inflation U.S. households are facing will arrive on Thursday, and economists expect it to show a slowdown.

While the report on wholesale inflation was above expectations, Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said it wasn’t enough to change her forecast that the Fed’s main interest rate is already at its peak.

“Fed officials are gradually taking comfort with the fact that the July rate hike may have been the last one in this historic tightening cycle,” said Gregory Daco, chief economist at EY.

Minutes from the Fed’s meeting last month suggested officials see the outlook for the U.S. economy as particularly uncertain. They said they were ready to “proceed carefully” in deciding what to do next with rates.

Still, with the U.S. government racking up big deficits that require more borrowing, and buyers in shorter supply, the pressure has been mostly upward on Treasury yields.

In energy trading, a further pullback in crude oil prices is helping to take some heat off inflation and support Wall Street. Benchmark U.S. crude lost 27 cents to $83.23 a barrel in electronic trading on the New York Mercantile Exchange. It slumped $2.48 to settle at $83.49 on Wednesday. Brent crude, the international standard, fell 47 cents to $85.35 per barrel.

Oil prices have given back much of their strong gains from earlier this week, triggered by fighting in Gaza. Though the area doesn’t produce much oil, the worry is that the violence could spill into the politics around the crude market and hurt the flow of petroleum.

Energy stocks in the S&P 500 logged the sharpest losses among the 11 sectors that make up the index.

Exxon Mobil felt extra pressure after it said it would buy Pioneer Natural Resources in an all-stock deal valued at $59.5 billion. Exxon Mobil fell 3.6%, and Pioneer Natural Resources rose 1.4%.

In currency trading, the U.S. dollar rose to 149.11 Japanese yen from 149.07 yen. The euro cost $1.0638, up from $1.0626.

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October 12, 2023
Birkenstock stumbles in its stock market debut as Wall Street trades in its wingtips for sandals

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Birkenstock shares are tumbling as the stock makes its debut on the New York Stock Exchange as Wall Street trades in its wingtips for sandals for a day

ByMICHELLE CHAPMAN AP business writer

October 11, 2023, 9:13 AM

Birkenstock CEO Oliver Reichert visits the New York Stock Exchange trading floor prior to his company’s IPO, Wednesday, Oct. 11, 2023. (AP Photo/Richard Drew)

The Associated Press

NEW YORK — Birkenstock shares are stumbling in their debut on the stock market as Wall Street trades in its wingtips for sandals for a day.

The 249-year-old German maker of upmarket sandals set a price of $46 per share for its initial public offering of stock, valuing the company at $8.64 billion. The stock opened for trade at $41, which was below the range of $44 to $49 it had been expected to price just a week ago.

Birkenstock is listed on the New York Stock Exchange under the “BIRK” ticker symbol. Birkenstock Holding Ltd. sold about 10.8 million shares in the offering, raising about $495 million. Its shareholders sold an additional 21.5 million shares.

The company’s footwear was first cobbled together by Johann Adam Birkenstock in Germany in 1774. The sandals have long been derided as the antithesis of high fashion but have a cult following and this year got a plug in the blockbuster film “Barbie.”

“Through the strong reputation and universal appeal of our brand — enabling extensive word-of-mouth exposure and outsized earned media value — we have efficiently built a growing global fanbase of millions of consumers that uniquely transcends geography, gender, age and income,” Birkenstock said in a recent regulatory filing with the Securities and Exchange Commission.

Birkenstock’s formula for success began with a view that humans are intended to walk barefoot. The company said in its filing that its footbed, which was developed in 1902, “represents the best alternative to walking barefoot, encouraging proper foot health by evenly distributing weight and reducing pressure points and friction.”

Birkenstock makes all of its footbeds in Germany and assembles more than 95% of its products there. The remaining products are made elsewhere in the European Union.

The company’s revenue has increased from 727.9 million euros ($771.7 million) in fiscal 2020 to 1.24 billion euros ($1.32 billion) in fiscal 2022.

Birkenstock’s IPO will be the fourth to launch in the U.S. in the past month, following Arm Holdings, Klaviyo and Instacart. There were just 71 IPOs in the U.S. last year, the lowest number since 2009, according to Renaissance Capital.

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October 11, 2023
Stock market today: Asian shares rise after eased pressure on bonds pushes Wall Street higher

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BANGKOK — Shares advanced Wednesday in Asia, tracking Wall Street gains following an easing of pressure from the bond market.

U.S. futures slipped and oil prices rose slightly.

In Hong Kong, investor sentiment got a boost from a report by Bloomberg, citing unnamed sources, that the government is considering boosting spending on construction to support the economy.

China’s lackluster recovery from the blows to its economy during the COVID-19 pandemic has weighed heavily on regional and global growth.

The Hang Seng in Hong Kong added 1.4% to 17,919.56 and the Shanghai Composite index was edged less than 0.1% lower, to 3,073.50.

Tokyo’s Nikkei 225 index climbed 0.6% to 31,936.51.

In South Korea, the Kospi jumped 2%, to 2,449.55 after Samsung Electronics reported improved quarterly earnings. Samsung’s shares surged 3%, while SK Hynix’s were up 0.9%. Analysts say the worst of the post-pandemic contraction in demand for computer chips and electronic devices may be over.

Australia’s S&P/ASX 200 advanced 0.7% to 7,088.40. In India, the Sensex added 0.6% and in Bangkok the SET was up 1.4%.

Investors have taken heart amid signs that upward pressure on inflation in many economies may be easing, which would enable the Federal Reserve and other central banks to halt or reverse aggressive interest rate hikes meant to curb rising prices.

On Tuesday, the S&P 500 gained 0.5% to 4,358.24. The Dow Jones Industrial Average rose 0.4% to 33,739.30, and the Nasdaq composite climbed 0.6% to 13,562.84.

PepsiCo rose 1.9% after it reported stronger profit and revenue for its latest quarter than analysts expected.

Some of the strongest action was in the bond market, where Treasury yields eased after trading resumed following a holiday on Monday. It was the first opportunity for yields to move since the weekend’s surprise attack by Hamas on Israel injected caution into global markets.

Perhaps more impactfully, it was also the first trading for Treasurys since speeches by Federal Reserve officials that traders took as a suggestion the Fed may not raise its main interest rate again. The comments helped U.S. stocks swing from early losses to gains on Monday.

The yield on the 10-year Treasury has fallen to 4.64% from 4.80% late Friday, which is a considerable move for the bond market. The two-year Treasury yield, which moves more closely with expectations for the Fed’s actions, sank to 4.97% from 5.09%.

Treasury yields had jumped last week to their highest levels in more than a decade, following the lead of the Fed’s main interest rate, which is at heights unseen since 2001. They’ve been the main reason for the stock market’s stumbles since the summer, as worries rise that the Fed will keep its federal funds rate at a high level for longer than Wall Street hopes.

High rates and longer-term yields knock down prices for stocks and other investments, while slowing the economy in hopes of undercutting high inflation.

But the swift rise in the 10-year Treasury yield has helped pull the average long-term mortgage rate up to its highest level since 2000, and Fed officials have intimated such moves may help contain high inflation on their own.

The Fed’s next announcement on interest rates is due Nov. 1. Traders are now betting on a nearly 73% chance that the year will end without any more Fed rate hikes, according to data from CME Group. That’s up from the 53% chance seen a week ago.

In other trading, a barrel of U.S. crude picked up 12 cents to $86.09 per barrel in electronic trading on the New York Mercantile Exchange. It fell 41 cents to settle at $85.97 on Tuesday, giving back a bit of its $3.59 leap a day earlier due to the fighting in the Middle East.

Brent crude, the international standard, was up 12 cents at $87.77 per barrel. It fell 50 cents to $87.50 per barrel on Tuesday.

The U.S. dollar rose to 148.92 Japanese yen from 148.72 yen. The euro slipped to $1.0606 from $1.0608.

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October 11, 2023
American Airlines, Carnival fall; Northrop Grumman, ConocoPhillips rise, Monday, 10/9/2023

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Stocks that traded heavily or had substantial price changes on Monday:

ByThe Associated Press

October 9, 2023, 12:21 PM

NEW YORK — NEW YORK (AP) —

Stocks that traded heavily or had substantial price changes on Monday:

Northrop Grumman Corp., up $48.37 to $471.61.

Military contractors jumped on rising tensions as Israel and Hamas waged war.

American Airlines Group Inc., down 52 cents to $12.24.

Airlines suspended flights to Israel as the U.S. State Department warned about travel to the region.

ConocoPhillips, up $6.49 to $121.82.

Energy stocks rose along with a jump in oil prices.

Carnival Corp., down 57 cents to $12.69.

Cruise lines companies and other travel-related stocks fell amid increased worries about global conflicts.

General Motors Co., rose 9 cents to $30.99.

A labor strike against Detroit automakers entered its fourth week.

Apollo Global Management Inc., down $1.39 to $89.18.

The private equity firm is reportedly preparing a joint buyout offer for Vodafone’s Spanish unit.

Exelon Corp., up 62 cents to $38.70.

Utilities gained ground along with the broader market in a mostly unsteady day of trading.

Freeport-McMoRan Inc., up 16 cents to $36.83.

The copper and gold mining company rose along with prices for both metals.

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October 9, 2023
Rising long-term interest rates are posing the latest threat to a US economic ‘soft landing’

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WASHINGTON — Surging interest rates are intensifying the challenges for the U.S. economy and threatening to derail the Federal Reserve’s drive to tame inflation without causing a deep recession.

Since mid-summer, the yield on the 10-year Treasury note, a benchmark for many loans, has steadily climbed, causing a spillover rise in other borrowing costs. The costs of mortgages, auto loans and credit card debt have all risen in response. The collective impact of higher rates across the economy could also weaken the government’s own finances.

The jump in longer-term rates coincides with other threats, from higher gas prices and this week’s resumption of student loan payments to autoworkers’ ongoing strike and the risk of a government shutdown next month, all of which could leave consumers with less money to spend to power the economy.

The strike by the United Auto Workers, now in its third week with no resolution in sight, could reduce vehicle sales in coming months. And the threat of a government shutdown, narrowly averted this past weekend, looms large, especially given the chaos over the leadership of the House of Representatives. Far-right Republican House members deposed their leader, Rep. Kevin McCarthy, on Tuesday for working with Democrats to temporarily avoid a shutdown.

The economy is coming off a robust summer, fueled by strong consumer spending on travel, concert tours and movie blockbusters. The economy is estimated to have grown at a healthy 3.5% annual rate in the July-September quarter, according to economists at Goldman Sachs.

Yet growth will likely slow to a meager 0.7% annual rate in the final three months of the year, Goldman estimates. With borrowing rates high and inflation still relatively elevated, consumers, who drive about 70% of economic growth, are expected to spend more cautiously.

On Friday, the government will provide a snapshot of how employers are factoring the turmoil into their hiring plans when it issues the September jobs report. Economists have forecast that it will show that employers added a solid 162,000 jobs last month and that the unemployment rate dipped to 3.7%, near a half-century low, from 3.8%.

But the substantial rise in borrowing costs could intensify the economy’s slowdown. The yield on the 10-year Treasury touched a 16-year high of 4.8% on Tuesday, up from 3.3% in April. Last week, the average 30-year fixed rate mortgage hit 7.3%, the highest rate in 23 years, according to mortgage buyer Freddie Mac.

On Tuesday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, said she and other Fed policymakers will have to consider the rise in long-term rates in deciding whether to raise their key rate once more before year’s end. Her remarks suggested that the higher borrowing costs might lead the Fed to forgo another hike.

“That will influence not only our policy decisions but how the economy evolves over the next year,” Mester said. “Those tighter, higher rates will have an impact on the economy.”

Financial analysts point to several reasons for the rapid increase in lending rates. To begin with, the Fed has repeatedly underscored that it intends to keep its key rate elevated for much longer than financial markets had expected earlier this year. And the economy’s ability to keep growing, even as the Fed has jacked up rates, has lent the impression that it can withstand higher borrowing costs.

The economy’s resilience in the face of higher rates could mean that borrowing costs will stay higher than they did after the 2008-2009 financial crisis, which led the Fed to cut its rate to near zero. During that period, the 10-year Treasury yield dropped to as low as 1.5%, and mortgage rates even fell below 3% during the pandemic.

The Treasury Department is now also auctioning off more debt to cover the government’s swelling budget deficit, which reached $1.5 trillion this year and is expected to rise further in 2024. The supply of Treasurys is growing even as the Fed is reducing its holding of bonds. Overseas buyers have reduced their purchases, thereby forcing rates higher to attract buyers.

“All of that is driving these fears of higher rates, and no one knows when it’s going to stop,” said Gennadiy Goldberg, head of US rates strategy at TD Securities.

Benson Durham, a former Fed economist who is head of global policy at Piper Sandler, suggested that long-term rates are rising because investors consider it riskier to hold government debt for the long run when the economy appears particularly volatile and uncertain, as it does now.

And Fed officials, Durham noted, have shifted from well-telegraphed rate hikes to a hazier stance. Chair Jerome Powell has repeatedly stressed that the central bank is “data dependent,” meaning it will raise rates again only if the latest economic data supports doing so — or forgo a rate hike if inflation falls steadily.

“What they’re really telling us is, ‘We’re all over it like a cheap suit, but we’re not sure what exactly we’re going to do,’ ” Durham said.

In addition to higher rates, student loans are expected to take a noticeable bite out of the economy. Roughly 43 million people will resume paying several hundred dollars a month to the government, which Goldman estimates could cut one-half of a percentage point from annual growth in the October-December quarter. More expensive gas could shave an additional 0.3 percentage point from growth in both the fourth quarter and the first three months of next year, Goldman estimates.

A government shutdown, should it occur next month, would lop another 0.2 percentage point off growth for each week it endures, according to calculations by Nancy Vanden Houten, an economist at Oxford Economics.

“We think the narrative is going to shift quite materially before the end of the year,” said David Page, head of macro research at AXA IM, a London-based investment manager, who expects the economy to actually shrink in the fourth quarter.

Rather than optimism for a “soft landing,” in which inflation is curbed without causing a recession, there will be renewed fears of a downturn, he said.

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October 5, 2023
Stock market today: Asian markets sink, with Hong Kong down almost 3% on selling of property stocks

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BANGKOK — Asian markets declined Tuesday following a mixed session on Wall Street, where buying was pressured by rising bond yields.

U.S. futures fell and oil prices also were lower.

Hong Kong’s Hang Seng dropped more than 3% as investors unloaded property shares. However, China Evergrande was up nearly 16%, resuming trading after its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation. Earlier in the session it’s shares soared more than 60%.

By midday, the Hang Seng was down 3% at 17,278.37. Markets in mainland China and South Korea remained closed for holidays.

Tokyo’s Nikkei 225 index fell 1.7% to 31,231.37, while Australia’s S&P/ASX 200 skidded 1.3% to 6,943.40. India’s Sensex declined 0.6% to 65,462.02.

Bangkok’s SET was down 1.4% and Taiwan’s Taiex fell 0.6%.

On Monday, the S&P 500 ended little changed at 4,288.39, while the Dow Jones Industrial Average slipped 0.2% to 33,433.35. The Nasdaq composite rose 0.7% to 13,307.77.

Oil-and-gas stocks sank as crude prices gave back some of the sharp gains made since the summer.

Early Tuesday, U.S. benchmark crude oil was down 71 cents at $88.11 per barrel in electronic trading on the New York Mercantile Exchange.

Prices have pulled back after charging higher from $70 in the summer. A barrel of U.S. crude fell $1.97 on Monday to settle at $88.82.

Brent crude, the international standard, gave up 94 cents to $89.76 per barrel. On Monday, Brent lost $1.49 to settle at $90.71 a barrel.

Lower oil prices weighed on energy stocks. Exxon Mobil fell 1.7% and Chevron lost 1.2%.

Stocks have given back 40% of their strong gains for the year since the end of July. The main reason is a growing recognition that high interest rates will persist for a while as the Federal Reserve tries to knock high inflation lower.

That in turn has pushed Treasury yields to their highest levels in more than a decade.

The yield on the 10-year Treasury rose Monday to 4.67% from 4.58% late Friday. It’s near its highest level since 2007. High yields send investors toward bonds that are paying much more than in the past, which pulls dollars away from stocks and undercuts their prices.

Any relief rally from a compromise spending bill approved by Congress over the weekend, which has staved off a U.S. government shutdown for another few weeks, appeared muted under pressure from heavy selling of bonds, which pushed yields higher.

“So, investors were on the fence, carefully considering the relationship between economic growth and interest rates and what actions the Federal Reserve might take in response to these factors,” Stephen Innes of SPI Asset Management said in a commentary.

Stocks that pay high dividends with relatively steady businesses are squeezed because investors are more likely to switch between stocks and bonds. That puts a harsh spotlight on utility companies. PG&E dropped 5.6%, and Dominion Energy sank 5.3% for some of the sharpest losses in the S&P 500.

High interest rates also make borrowing more expensive for all kinds of companies, which can pressure their profits. High interest rates are designed to slow the overall economy and can cause disruptions in far-flung, unexpected corners of the economy.

The overall U.S. economy has so far been holding up, defying predictions that it would have fallen into a recession by now.

SmileDirectClub plunged 61.2% to 16 cents after the company that helps people straighten their teeth filed for Chapter 11 bankruptcy protection.

In currency dealings Tuesday, the dollar rose to 149.93 Japanese yen from 149.86 yen. The euro declined to $1.0462 from $1.0480.

The dollar has gained in value against many other currencies as U.S. interest rates have risen faster than those in many other countries. Higher interest rates can mean higher yields for investments.

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October 3, 2023
Stock market today: Asian markets sink, with Hong Kong down almost 3% on selling of property stocks

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BANGKOK — Asian markets declined Tuesday following a mixed session on Wall Street, where buying was pressured by rising bond yields.

U.S. futures fell and oil prices also were lower.

Hong Kong’s Hang Seng dropped more than 3% as investors unloaded property shares. However, China Evergrande was up nearly 16%, resuming trading after its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation. Earlier in the session it’s shares soared more than 60%.

By midday, the Hang Seng was down 3% at 17,278.37. Markets in mainland China and South Korea remained closed for holidays.

Tokyo’s Nikkei 225 index fell 1.7% to 31,231.37, while Australia’s S&P/ASX 200 skidded 1.3% to 6,943.40. India’s Sensex declined 0.6% to 65,462.02.

Bangkok’s SET was down 1.4% and Taiwan’s Taiex fell 0.6%.

On Monday, the S&P 500 ended little changed at 4,288.39, while the Dow Jones Industrial Average slipped 0.2% to 33,433.35. The Nasdaq composite rose 0.7% to 13,307.77.

Oil-and-gas stocks sank as crude prices gave back some of the sharp gains made since the summer.

Early Tuesday, U.S. benchmark crude oil was down 71 cents at $88.11 per barrel in electronic trading on the New York Mercantile Exchange.

Prices have pulled back after charging higher from $70 in the summer. A barrel of U.S. crude fell $1.97 on Monday to settle at $88.82.

Brent crude, the international standard, gave up 94 cents to $89.76 per barrel. On Monday, Brent lost $1.49 to settle at $90.71 a barrel.

Lower oil prices weighed on energy stocks. Exxon Mobil fell 1.7% and Chevron lost 1.2%.

Stocks have given back 40% of their strong gains for the year since the end of July. The main reason is a growing recognition that high interest rates will persist for a while as the Federal Reserve tries to knock high inflation lower.

That in turn has pushed Treasury yields to their highest levels in more than a decade.

The yield on the 10-year Treasury rose Monday to 4.67% from 4.58% late Friday. It’s near its highest level since 2007. High yields send investors toward bonds that are paying much more than in the past, which pulls dollars away from stocks and undercuts their prices.

Any relief rally from a compromise spending bill approved by Congress over the weekend, which has staved off a U.S. government shutdown for another few weeks, appeared muted under pressure from heavy selling of bonds, which pushed yields higher.

“So, investors were on the fence, carefully considering the relationship between economic growth and interest rates and what actions the Federal Reserve might take in response to these factors,” Stephen Innes of SPI Asset Management said in a commentary.

Stocks that pay high dividends with relatively steady businesses are squeezed because investors are more likely to switch between stocks and bonds. That puts a harsh spotlight on utility companies. PG&E dropped 5.6%, and Dominion Energy sank 5.3% for some of the sharpest losses in the S&P 500.

High interest rates also make borrowing more expensive for all kinds of companies, which can pressure their profits. High interest rates are designed to slow the overall economy and can cause disruptions in far-flung, unexpected corners of the economy.

The overall U.S. economy has so far been holding up, defying predictions that it would have fallen into a recession by now.

SmileDirectClub plunged 61.2% to 16 cents after the company that helps people straighten their teeth filed for Chapter 11 bankruptcy protection.

In currency dealings Tuesday, the dollar rose to 149.93 Japanese yen from 149.86 yen. The euro declined to $1.0462 from $1.0480.

The dollar has gained in value against many other currencies as U.S. interest rates have risen faster than those in many other countries. Higher interest rates can mean higher yields for investments.

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October 2, 2023
Stock market today: Wall Street holds steadier as its September swoon eases a bit

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NEW YORK — Wall Street is holding a bit steadier, and stocks are waffling Wednesday after falling sharply through most of September so far.

The S&P 500 was virtually unchanged after drifting between small gains and losses through the morning. It’s coming off a 1.5% tumble from the day before that dragged it to its lowest level since June.

The Dow Jones Industrial Average was down 55 points, or 0.2%, at 33,563, as of 11:11 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.

Pressure on stocks continued from the bond market, but it wasn’t increasing by much. The yield on the 10-year Treasury had dropped as low as 4.49% before pulling back to 4.55%, which is where it was late Tuesday.

It’s been generally charging higher as traders accept a new normal where interest rates will stay high for longer. High yields mean bonds are paying more in interest, which makes investors less willing to pay high prices for stocks and other riskier investments.

After more than a decade where the Federal Reserve would often cut rates in order to help the economy, still-high inflation is now discouraging the Fed from lowering rates quickly. It’s already raised its main interest rate to the highest level since 2001, and it indicated last week it will cut rates by less in 2024 than earlier expected.

Strategists at Bank of America say yields could keep rising further. Even if the Fed is close to done with hiking its overnight interest rate, it could hold the rate there for a long time. That in turn would push up medium- and longer-term yields.

It all has brought an end to the old era of investing, where the mantra was “There Is No Alternative” to stocks because bonds were paying such scant yields. With bonds now paying much more and providing real alternatives, stock prices could feel downward pressure for a while.

Even so, the “Fed won’t be overly reactive” to drops in stock prices because the overall economy remains solid, the strategists led by Mark Cabana wrote in a BofA Global Research report.

A report on Wednesday said orders for long-lasting manufactured goods were stronger last month than economists expected. It’s the latest signal that the overall economy remains solid despite much higher interest rates.

The upside of such strength means the economy has so far avoided a long-predicted recession. But it also could keep enough upward pressure on inflation to encourage the Fed to keep rates high.

Recent jumps in oil prices have likewise turned up the heat on inflation, and crude climbed further Wednesday.

Benchmark U.S. crude rallied 3.2% to $93.30 per barrel, up from less than $70 in June. Brent crude, the international standard, added 1.8% to $94.08 per barrel.

The spurt helped stocks in the oil and gas industries to some of the market’s most significant gains. Halliburton, an oilfield services provider, climbed 3.7%, and Marathon Oil rose 3.7%.

Costco Wholesale was another winner, rising 1.8% after it reported stronger profit for the latest quarter than analysts expected.

On the losing end of Wall Street was NextEra Energy Partners, which fell 18%. The partnership cut its growth forecast for how much it will distribute to unit holders, citing the burden of higher interest rates.

Besides high interest rates, a long list of other worries is also tugging at financial markets. The most immediate is the threat of another U.S. government shutdown as Capitol Hill threatens a stalemate that could shut off federal services across the country as soon as this weekend.

A shutdown would furlough millions of federal employees, leave the military without pay, disrupt air travel and cut off vital safety net services. Stock prices have managed through past shutdowns relatively well, but conditions may be a little different this time.

Economists at Goldman Sachs expect all data reports from the federal government to be postponed during the shutdown. That could complicate things for the Federal Reserve, which has said repeatedly it will make its upcoming decisions on interest rates based on what reports say about inflation and the job market.

The next monthly jobs report is due on Oct. 6, and two big inflation reports are due the following week.

Other threats looming over Wall Street include shaky economies around the world, a strike by U.S. auto workers that could put more upward pressure on inflation and a resumption of U.S. student-loan repayments that could dent spending by households.

Stock markets abroad were mixed.

Indexes rose 0.8% in Hong Kong and 0.2% in Shanghai even though concerns remain high about a faltering economic recovery and troubles for Chinese property developers, including the heavily indebted Evergrande.

In Europe, meanwhile, indexes were mostly lower.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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September 27, 2023