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US Stocks, Bonds Drift as Oil Falls 08/26 09:43
The U.S. stock market is drifting Wednesday after a report said inflation
last month was a touch worse than economists expected. The bond market held
relatively steady following some brief swings, while oil prices continued to
drop.
NEW YORK (AP) -- The U.S. stock market is drifting Wednesday after a report
said inflation last month was a touch worse than economists expected. The bond
market held relatively steady following some brief swings, while oil prices
continued to drop.
The S&P 500 edged down by 0.1% but remains near its all-time high set
earlier this month. The Dow Jones Industrial Average was down 43 points, or
0.1%, following the first few minutes of trading, and the Nasdaq composite was
0.2% lower.
Wall Street is making relatively few big moves ahead of an earnings report
coming from its most influential stock, Nvidia, after trading ends for the day.
Expectations are once again high for the chip giant, whose tremendous growth in
profit because of the artificial-intelligence boom has made it the largest
stock by value in the U.S. market.
AI stocks have become shakier through the summer on worries that their
prices shot too high and that demand for chips may fizzle out if AI does not
produce as much profit as hoped. That has anticipation high to see what kind of
forecast Nvidia gives for upcoming revenue.
Strong profit growth across U.S. companies broadly has been the main reason
the U.S. stock market has run to records this year.
Abercrombie & Fitch leaped 26.2% after reporting much stronger profit for
the latest quarter than analysts expected. Growth was so strong that the
retailer raised its forecast for earnings over the full year, as well as for
how much cash it will send to investors by buying back shares of its own stock.
J.M. Smucker climbed 6.3% after likewise reporting sweeter results than
analysts expected for the spring. The seller of Folgers coffee and Smucker's
jams also raised its forecast for profit over the full year.
On the losing end of Wall Street was Intuit, even though the company behind
TurboTax, Credit Karma and QuickBooks topped analysts' profit expectations in
the latest quarter. It fell 3% after giving a forecast for profit growth of
nearly 25% in its upcoming fiscal year, which fell short of analysts'
expectations.
Outside of earnings reports, Meta Platforms climbed 2.7% after agreeing to
pay $17 billion and add child-safety measures to Facebook and Instagram to end
a landmark trial over teen social media addiction and settle claims filed by
states across the country.
In the bond market, which has been home recently to some of Wall Street's
strongest action, Treasury yields edged higher following the reports on
inflation and economic growth.
Yields have shot higher through the summer on worries about high inflation
and the U.S. government's growing and gargantuan debt, along with other
factors. They got so high that the U.S. Treasury Department made a surprise
announcement last week to intervene in the market, though analysts say its
effect could be limited.
The latest update on Wednesday said that the measure of inflation the
Federal Reserve has historically preferred to use sat at 3.7% last month. That
was the same rate of inflation as in June and slightly worse than the 3.6% that
economists expected, according to FactSet. It remains far worse than the 2%
goal the Fed has set.
Growth in spending by U.S. consumers, which is the main engine of the
economy, slowed at the same time.
The overall economy grew at a 1.5% annual pace in the spring, according to a
revised estimate of its performance, the same amount as the government's first
estimate.
It all helped Treasury yields squiggle up and down before the 10-year
Treasury yield climbed to 4.65%, up from 4.64% late Tuesday.
Helping to restrain the climb in yields was another drop for oil prices,
which tempered worries about upcoming inflation a bit.
The price for a barrel of Brent crude, the international standard, fell 1.8%
to $85.70. It's been swinging sharply through the summer on uncertainty about
when the war with Iran will allow oil tankers to freely exit the Persian Gulf
again.
In stock markets abroad, indexes rose modestly across much of Europe and
Asia.
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