Stock market today: Wall Street drifts in a tight range as talks on avoiding a U.S. default continue
By Yuri Kageyama And Matt Ott, The Associated Press on May 22, 2023.
NEW YORK (AP) – Stocks are movingly tentatively as Wall Street waits to see whether a pivotal meeting in the afternoon will help the U.S. government avoid a potentially disastrous default on its debt. The S&P 500 was little changed in early trading Monday after coming off its best week since March. The Dow and the Nasdaq composite were also flat. The stock market is near its highest level since August, but it’s been mostly drifting within a tight range for weeks as several big worries weigh. The biggest near-term risk is the possibility of a U.S. default, something that could occur as soon as June 1. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street is trading small gains and losses early Monday as a deadline nears to reach a deal to avoid a federal default. Dow and S&P futures rose less than than 0.1% before the bell. There’s a pivotal meeting set for later in the day at the White House between President Joe Biden and House Speaker Kevin McCarthy on the debt ceiling. A default on the U.S. debt would almost surely cause a recession in the American economy, which would have damaging effects on economies worldwide. “It seems pretty likely that a full-fledged deal will be reached before early June, but the timing is hard to predict,” Stephen Innes, managing partner at SPI Asset Management, said of the U.S. efforts to avoid a potentially disastrous default on its debt. “While negotiation strategy and political incentives imply a last-minute deal, we will soon find out if it’s baked beans or lobster during the Memorial Day holiday.” The White House and House Republicans wrapped up another round of talks over the weekend. Washington needs to strike a budget compromise along with a deal to raise the nation’s borrowing limit to avoid a federal default. Democrats and Republicans face a June 1 deadline, which is when the U.S. government could run out of cash to pay its bills unless Congress allows it to borrow more. On the positive side, U.S. Federal Reserve Chair Jerome Powell made comments Friday indicating the Fed may leave interest rates alone at its next meeting in June. The majority of companies in the S&P 500 have been reporting stronger earnings for the start of the year than analysts expected. But they’re still on track to report a second consecutive quarter of profit declines from year-ago levels. Facebook parent company Meta lost 1.4% in premarket trading after the European Union slapped the social media giant with a record $1.3 billion privacy fine Monday. The EU ordered Meta to stop transferring user data across the Atlantic by October, the latest salvo in a decadelong case sparked by U.S. cybersnooping fears. Meta, which had previously warned that services for its users in Europe could be cut off, vowed to appeal and ask courts to immediately put the decision on hold. Shares of Micron slumped more than 4% in premarket after China’s government on Sunday told users of computer equipment deemed sensitive to stop buying products from the biggest U.S. memory chipmaker. Micron products have unspecified “serious network security risks” that pose hazards to China’s information infrastructure and affect national security, the Cyberspace Administration of China said on its website. In Japan, data for machinery orders in March, released Monday, highlighted a slowdown in the world’s third-largest economy, with the key indicator falling 3.9% for the second straight month of declines. But analysts think a recovery is coming during this quarter, as domestic manufacturing gradually rebounds from the various negative effects related to the pandemic. Japan’s benchmark Nikkei 225 gained 0.9% to finish at 31,086.82. Australia’s S&P/ASX 200 slid 0.2% to 7,263.30. South Korea’s Kospi gained 0.8% to 2,557.08. Hong Kong’s Hang Seng jumped 1.2% to 19,678.17, while the Shanghai Composite edged up 0.4% to 3,296.47. France’s CAC 40 and Germany’s DAX each slipped 0.3%, while Britain’s FTSE 100 was unchanged. In energy trading, benchmark U.S. crude picked up 15 cents to $71.70 a barrel. Brent crude, the international standard, gained 22 cents to $75.80 a barrel. In currency trading, the U.S. dollar rose to 138.28 yen from 137.88 yen. The euro cost $1.0824, up from $1.0808. ___ Kageyama reported from Tokyo; Ott reported from Silver Spring, Md. 22-21
