Stock market today: Wall Street drifts lower as oil prices rise and Oracle weighs on tech stocks
By Stan Choe, The Associated Press on September 12, 2023.
NEW YORK (AP) – Stocks drifted to a lower close as Wall Street waits for highly anticipated reports later this week about inflation and the economy. The S&P 500 fell 0.6% Tuesday. The Dow slipped 17 points, and the Nasdaq composite fell 1%. Oracle weighed on tech stocks after the software giant reported revenue that fell just short of what analysts expected. Stocks broadly have see-sawed in recent weeks amid uncertainty about whether the Federal Reserve is done with hiking interest rates. Reports coming up on Wednesday and later this week on inflation and retail sales could sway the Fed’s thinking. Treasury yields were relatively steady. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. NEW YORK (AP) – U.S. stocks are drifting Tuesday as Wall Street waits for highly anticipated reports later this week about inflation and the economy. The S&P 500 was 0.4% lower in afternoon trading. The Dow Jones Industrial Average was up 50 points, or 0.1%, at 34,714, as of 2:35 p.m. Eastern time, and the Nasdaq composite was 0.8% lower. Software giant Oracle was weighing on tech stocks after reporting revenue for the latest quarter that fell just short of what analysts expected. Its stock tumbled 14.1%, even though its profit topped expectations. Oracle’s forecast for how much revenue it will make in the current quarter wasn’t as strong as some analysts expected, even as it touts customers signing up for services because of the boom around artificial-intelligence technology. Apple was 1.7% lower after it unveiled its latest phone models and other devices. The stock soared through much of this year, which is crucial for many investors because it’s the most valuable company on Wall Street and has more sway on the S&P 500 than others. But it’s been struggling since the end of July and has reported three straight quarters where its revenue fell from year-earlier levels. Alphabet, meanwhile, was 0.8% lower as an antitrust trial against Google opens in federal court. It’s the biggest such trial since regulators took Microsoft to court in 1998. The U.S. government is accusing Google of abusing its position as the world’s dominant search engine and forcing consumers to settle for inferior search results. On the winning side of Wall Street, stocks of oil producers rose with the price of crude. Exxon Mobil rose 2.7% and was the single strongest forces pushing upward on the S&P 500. Occidental Petroleum gained 4%. Oil prices have been climbing since the end of June after mostly falling for a year. A barrel of U.S. crude rose 1.9% to $88.94, while Brent crude, the international standard, added 1.6% to $92.06 per barrel. Stocks broadly have been see-sawing in recent weeks amid uncertainty about whether the Federal Reserve is done with its avalanche of hikes to interest rates. The central bank has already pulled its main interest rate to the highest level in more than two decades, as it tries to get inflation back down to its target of 2%. High rates work to undercut inflation by slowing the entire economy and knocking down prices for stocks and other investments. Several strong reports on the economy recently have allayed worries about a painful recession, defying long-held predictions for just that. But they also may be adding more fuel to pressures keeping inflation high, which could push the Fed to keep rates higher for longer. Hopes for the economy to remain resilient mean professional fund managers are globally feeling less pessimistic about stocks. They’re investing the most in stocks that they have in the past 17 months, according to a survey by Bank of America, though they’re not going all-in and continue to keep a significant chunk of their portfolios in the safety of cash. Sixty percent of fund managers say they think the Fed is done hiking rates, investment strategists led by Michael Hartnett wrote in a BofA Global Research report. That’s a sharp turnaround from July, when just 9% were saying that. Several reports coming up this week could sway the Fed’s thinking. On Wednesday will come the latest monthly update on prices that U.S. consumers are paying across the country. Economists expect it to show that prices were broadly 3.6% higher last month than a year earlier. Inflation has been mostly cooling since peaking above 9% last summer, but economists warn the last bit of improvement may be the most difficult to win. On Thursday will come reports about inflation at the wholesale level and about sales at U.S. retailers. Strong spending by U.S. households has been a main driver keeping the U.S. economy humming, but it could also be encouraging companies to keep trying to raise their prices further. Most traders expect next week’s meeting by Federal Reserve to leave interest rates where they are. But stronger-than-expected reports this upcoming week could sway things for later this year, where traders see a higher risk of another hike to rates. Traders have also been paring expectations for cuts to interest rates that could occur next year. In the bond market, the yield on the 10-year Treasury slipped to 4.27% from 4.29% late Friday. The two-year Treasury yield, which moves more on expectations for the Fed, rose to 5.01% from 4.99%. In stock markets abroad, Japan’s Nikkei 225 jumped 1%, while indexes were weaker across much of the rest of Asia. Stocks were mixed across Europe. Later this week, the European Central Bank will meet to decide what to do with interest rates for countries that use the euro currency. ___ AP Business Writers Yuri Kageyama and Matt Ott contributed. 26-25
