Wall Street opens lower, back in the red for a week | Economic news
NEW YORK (AP) — Stocks tumbled in early trading on Wall Street on Friday, pushing major indexes back into the red for the week after several sharp moves up and down. The market is also heading for steep losses in April as traders worry about the hard medicine that the Federal Reserve plans to fight inflation in the form of higher interest rates, which will increase the costs of borrowing at all levels, increasing lending rates for cars, credit cards and mortgages. Bond yields rose after another hot reading on inflation, and Amazon fell 11% after reporting a rare quarterly loss. The S&P 500 fell 1.1%.
THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.
Global stocks rose on Friday after Chinese leaders pledged to do more to support the slowing economy as the country faces its worst COVID-19 outbreaks since the pandemic began.
The German DAX gained 1% to 14,120.47 while the CAC 40 in Paris gained 0.9% to 6,567.01. Britain’s FTSE 100 climbed 0.5% to 7,547.01. The S&P 500 future was 0.3% lower while the Dow was virtually unchanged.
Chinese state media reported that the powerful Politburo of the ruling Communist Party agreed at a meeting on Friday to step up efforts to spur growth while curbing coronavirus outbreaks.
The party’s COVID-zero policies have pressured President Xi Jinping and other leaders to counter the blow to the economy from shutdowns aimed at defeating the virus. These restrictions are affecting the world’s second largest economy by disrupting shipping, manufacturing and other business activities.
“It is very important to do a good economic job and to secure and improve people’s livelihoods,” the official Xinhua News Agency said in a report on the meeting.
The report did not indicate any change in the leadership’s strategy to fight outbreaks.
But he said the meeting agreed to adjust policies to keep the economy, which was slowing even before the latest waves of coronavirus infections, “operating within a reasonable range” and to speed up the implementation of refunds and tax cuts, ensuring sufficient energy supplies and helping industries, small and medium-sized businesses and families severely affected by the pandemic.
“The Politburo meeting in China hits many of the right notes for the market: internet platforms can grow; supply chain disruptions are addressed; SMEs will get more help,” Stephen Innes of SPI Asset Management said in a report.
The message was more candid than previous ones, he said, but China “must follow the current policy. I see nothing new in the housing market and no direct consumer support.”
The Shanghai Composite Index gained 2.4% to 3,047.06 while Hong Kong’s Hang Seng Index jumped 4.1% to 21,101.27.
Tokyo was closed for a public holiday, the first of several in Japan’s upcoming “Golden Week”.
In Seoul, the Kospi gained 1% to 2,695.05, while Australia’s S&P/ASX 200 rose 1.1% to 7,435.00.
The benchmark U.S. crude oil price gained 32 cents to $105.70 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $3.34 to 105.36 a barrel on Thursday.
Brent crude, the pricing basis for international oils, gained 73 cents to $107.99.
After hours Thursday, SEC filings showed Elon Musk had sold 4.4 million Tesla shares worth about $4 billion, likely to help fund his purchase of Twitter.
Shares of Tesla closed slightly lower on Thursday at $877.51. They are down 17% since the start of the year.
Wall Street’s major stock indexes posted their biggest gains in more than six weeks on Thursday, as tech companies clawed back some of the ground they had recently lost.
The S&P 500 rose 2.5% and the Dow Jones Industrial Average gained 1.8%. The Nasdaq gained 3.1%, while the Russell 2000 added 1.8%.
It’s been a turbulent week as investors scrutinize a big batch of corporate earnings from big tech companies, industrial companies and retailers. Big tech and communications companies have been the source of much of the volatility as their expensive stock values carry more weight.
Supply chain issues have hampered business operations in many industries throughout the post-pandemic recovery and Russia’s war on Ukraine has compounded energy and major food price increases .
The US Federal Reserve is expected to hike rates aggressively as it steps up its fight against inflation. The Fed Chairman indicated that the central bank may raise short-term interest rates to double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such hike since 2018.
The Commerce Department reported Thursday that the U.S. economy contracted in the last quarter for the first time since the pandemic recession hit two years ago. But the report showed consumers and businesses continued to spend, despite rising prices, suggesting demand is resilient.
Investors will receive another spending update on Friday, a barometer of the economy as everything from food to clothing and gasoline becomes more expensive, when the Commerce Department releases its earnings report and personal expenses for March.
In currency trading, the dollar bought 130.13 Japanese yen, against 130.87 yen. The euro fell from $1.0536 to $1.0570.
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