Stock market today: Wall Street drifts a day after a rare August climb for stocks
By Stan Choe, The Associated Press on August 22, 2023.
NEW YORK (AP) – Wall Street is drifting Tuesday and may be heading toward its first back-to-back gain in what’s been a miserable August. The S&P 500 was up 0.1% in early trading, coming off a gain from Monday powered by Big Tech stocks. The Dow Jones Industrial Average was down 7 points, or less than 0.1%, at 34,456, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.2% higher. Stocks have struggled this month as yields have shot upward in the bond market, which cranks up the pressure on other investments. The yield on the 10-year Treasury edged a bit higher Tuesday, a day after reaching its highest level since 2007. Nvidia, one of Wall Street’s most influential stocks, swung from an early gain to a loss of 1.1% ahead of its earnings report on Wednesday, one that could be pivotal for the stock market. The chipmaker has been at the center of Wall Street’s frenzy around artificial-intelligence technology, which investors believe will create immense profits for companies. Nvidia’s stock has already more than tripled this year, and it likely faces a high a bar to justify the huge move. Analysts expect Nvidia to say on Wednesday that its revenue swelled by nearly $4.5 billion during the spring to $11.19 billion from a year earlier. Another Big Tech stock, Microsoft, was the strongest single force pushing the S&P 500 higher. It rose 0.7% as U.K. regulators consider a revamped bid by the company to buy video game maker Activision Blizzard, which would be one of the biggest deals in tech history. Also helping to lift the S&P 500 was Lowe’s, which rose 4% after reporting stronger profit for the latest quarter than analysts expected. The home improvement retailer also stood by its forecast for results over the full year, and said it gave over $100 million in bonuses to its front-line workers. On the losing side of Wall Street, Dick’s Sporting Goods plunged 24.3% after its profit for the latest quarter fell well short of expectations. It also cut its forecast for earnings over the full year, citing “inventory shrink.” That’s a term the industry uses to refer to theft and other losses of goods that never become sales. Macy’s fell 6.7% despite reporting stronger results for the latest quarter than Wall Street expected. It also stood by its financial forecasts for the full year, though it said economic conditions look uncertain. In the bond market, the 10-year Treasury yield ticked up to 4.35% from 4.34% late Monday. It’s the centerpiece of the bond market and helps set rates for mortgages and other important loans. The two-year Treasury yield, which moves more on expectations for the Federal Reserve, rose to 5.03% from 5.00%. More fireworks could come later this week, when Fed Chair Jerome Powell is scheduled to give a highly anticipated speech. He’ll be speaking Friday at a Fed event in Jackson Hole, Wyoming, the site of several major policy announcements by the Fed in the past. The Fed has already hiked its main interest rate to the highest level since 2001 in hopes of grinding high inflation down to its target of 2%. High rates work by slowing the entire economy bluntly and hurting prices for investments. Inflation has come down considerably from its peak above 9% last summer, but economists say getting the last percentage point of improvement may be the most difficult. The hope is that Powell on Friday may indicate the Fed is done with hiking interest rates for this cycle and that it could begin cutting them next year. But strong reports on the economy recently are hurting such hopes. A solid job market and spending by U.S. households could be feeding more fuel into pressures pushing upward on inflation. In stock markets abroad, indexes were mostly higher. Stocks rose in China to recover some of their sharp losses driven by worries about its faltering economic recovery. The Hang Seng in Hong Kong climbed 1%, though it remains down 11.4% for August so far. Stocks in Shanghai added 0.9% to trim its loss for the month to 5.2%. – – AP Business Writers Matt Ott and Joe McDonald contributed. 21-20
