Wall Street opens higher, adding to gains made last week
By Elaine Kurtenbach And Matt Ott, The Associated Press on January 9, 2023.
NEW YORK (AP) – Stocks are opening higher on Wall Street, extending gains from last week when the market posted its first weekly gain in five weeks. Energy stocks were among the biggest winners as crude oil prices rose about 3%. Technology stocks were also higher. Macy’s sank after tempering its sales forecast for its current quarter late Friday. Later this week big U.S. companies will start reporting their results for the last three months of the year, including Bank of America, JPMorgan Chase and Wells Fargo. The S&P 500 was up 0.7% early Monday, and the Nasdaq added 1.2%. The Dow rose 0.5%. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street appears ready to add to a rally last week ignited by data hinting at slowing U.S. wage gains, one of the goals of the Federal Reserve in its efforts to cool decades-high inflation. Futures for the Dow Jones industrials rose 0.3% while the S&P 500 rose 0.5%. On Friday, the four major U.S. indexes rose more than 2% after the government’s jobs report showed that wages nationwide rose 4.6% in December from a year earlier in the smallest increase since two summers ago. Economists had expected wage gains to pick up. At the same time, the report showed that hiring across the job market remains very strong. Amid the ups and downs, “investors may continue to embrace weak data, especially if signs of descending wage inflation continue,” Stephen Innes of SPI Asset Management. “Any indications in the data that the Fed could tap the brakes on its monetary tightening cycle could boost calls for a softer landing that may be optimal for equities.” The Fed has pulled its key overnight rate up to a range of 4.25% to 4.50% after it began last year at virtually zero. With inflation showing some signs of cooling in recent months, it trimmed its latest rate increase to 0.50 percentage points after four straight hikes of 0.75 points. Markets appear to be pricing in a more traditional hike of 0.25 points from the Fed at its meeting next month. Past rate hikes have already inflicted pain in areas of the economy that do best when rates are low, such as housing and high growth sectors like tech. Gains in technology shares Monday boosted benchmarks in Asia, where Japan’s markets were closed for a holiday. A Chinese financial news outlet cited a top central bank official as saying that China’s more than two-year crackdown on internet companies is nearly finished. Caixin quoted Guo Shuqing, the Communist Party secretary of the People’s Bank of China as saying the government would support companies in the sector in creating more jobs and competing globally. E-commerce giant Alibaba’s Hong Kong-traded shares jumped 8.7% and technology and entertainment company Tencent’s climbed 3.6%. Late Friday, Alibaba affiliate and leading Chinese financial technology provider Ant Group announced its founder, e-commerce billionaire Jack Ma, will give up control of the company. The move followed efforts by the Chinese government to rein in Ma and the country’s tech sector more broadly. Hong Kong’s Hang Seng index gained 1.9% to 21,388.34 while the Shanghai Composite index added 0.6% to 3,176.08. In South Korea, the Kospi added 2.6% to 2,350.19. Samsung Electronics, the country’s biggest company, gained 2.9%. Taiwan’s benchmark climbed 2.6% and Bangkok’s SET index added 1%. In Australia, the S&P/ASX 200 advanced 0.6% to 7,151.30. In afternoon European trading, Germany’s DAX gained 0.7% and the CAC 40 in Paris rose 0.4%. Britain’s FTSE 100 was mostly unchanged. In coming weeks, companies across industries will show how widespread the damage is when they report how much profit they made during the last three months of 2022. If companies across the S&P 500 report a drop in overall earnings per share, as some analysts suspect, it would be the first decline since the summer of 2020. In other trading, U.S. benchmark crude oil added $2.48 to $76.25 per barrel in electronic trading on the New York Mercantile Exchange. It added 10 cents to $73.77 per barrel on Friday. The oil price increase pulled energy company shares higher early Monday. Brent crude, the international pricing standard, picked up $2.47 to $81.04 per barrel. The U.S. dollar rose to 132.17 Japanese yen from 132.05 yen. The euro rose to $1.0692 from $1.0643. 23-22
