Wall Street opens higher but remains lower for the week
By Elaine Kurtenbach And Matt Ott, The Associated Press on December 21, 2022.
NEW YORK (AP) – Stocks are opening higher on Wall Street but remain mostly lower for the week as investors continue to worry that a recession is on the way. The S&P 500 index was up 0.7% in the early going Wednesday but is still slightly negative for the week. The Dow Jones Industrial Average was up 1% with a lot of help from Nike, which soared 15% after reporting results for its latest quarter that trounced analysts’ estimates. The tech-heavy Nasdaq was up 0.4%. Treasury yields were a bit lower. European markets were higher and Asian markets closed mixed overnight. Oil prices rose. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street pointed higher in premarket trading Wednesday, extending small gains from the day before that snapped a four-day losing streak. The future for the S&P 500 advanced 0.7% while the Dow Jones Industrial Average ticked 0.9% higher. Nike jumped 11% in before the opening bell after posting better-than-expected second quarter sales and profits. There is new data coming out Wednesday on home sales, as well as the Conference Board’s consumer confidence report for December. Home sales have declined for nine straight months as interest rates doubled over the past year. Inflation, rising interest rates and major layoffs in the tech sector sent consumer confidence in November to its lowest level since July. Markets have taken a beating in 2022 as the Federal Reserve has raised its key borrowing rate seven times this year in an effort to cool the economy and extinguish four-decade high inflation. Many economists fear the Fed’s aggressive fight against inflation – which the central bank has said will continue into 2023 – will result in a recession. On Tuesday, markets turned their attention to Japan, where its central bank in a surprise move expanded the cap yield of the 10-year Japanese government bond to 0.50%, from 0.25%. The Bank of Japan has kept its key lending rate at minus 0.1% for years, trying to spur growth by keeping credit ultra cheap. It was the last holdout among major, industrialized economies to raise rates and it rattled world markets Tuesday, with bond yields pushing higher. The yield on the 10-year Treasury slipped back down to 3.66% after rising to 3.72% late Tuesday. That yield helps set rates for mortgages and other economy-setting loans, which has already meant particular pain for the U.S. housing market. The two-year U.S. Treasury yield, which tends to more closely track expectations for action from the Federal Reserve, dipped slightly to 4.22%. Higher yields make borrowing more expensive, slowing the economy. That can alleviate upward pressure on prices, but it also pulls prices for stocks and other investments lower. The widening gap between the BOJ’s benchmark rate and rising interest rates in the U.S. and other economies has weakened the yen against the U.S. dollar and other currencies, causing prices for imported oil, consumer goods and industrial inputs to surge and adding to pressures on its economy. Tokyo’s benchmark Nikkei 225 index slipped 0.7%, to 26,387.72, a day after the Bank of Japan’s surprise move sent it tumbling 2.5%. Central banks around the world have been raising rates at an explosive clip and a growing number of economists and investors see a recession arriving in 2023. Both the Federal Reserve and European Central Bank have pledged to keep raising rates into next year to be sure they get inflation under control. At the same time, fresh waves of COVID-19 infections in China, Japan and other countries are casting a shadow over pandemic recoveries. In other Asian trading, Hong Kong’s Hang Seng gained 0.3% to 19,160.49 and the Shanghai Composite index slipped 0.2% to 3,068.41. South Korea’s Kospi lost 0.2% to 2,328.95. In Sydney, the S&P/ASX 200 gained 1.3% to 7,115.10. Shares rose in Bangkok and Taiwan but fell in Mumbai. In Europe at midday, Germany’s DAX rose 0.9%, while the CAC 40 in Paris jumped 1.2% and Britain’s FTSE 100 gained 1%. In the foreign exchange market, the dollar rose to 131.90 Japanese yen from 131.62 yen. Tokyo’s surprise move on Tuesday had pulled the dollar 4% lower against the yen. The euro inched up to $1.0635 from $1.0626. U.S. benchmark crude oil gained $1.96 to $78.05 per barrel in electronic trading on the New York Mercantile Exchange. It gained 1.2% on Tuesday. Brent crude, the pricing basis for international trading, picked up $1.87 to $81.86 per barrel. On Tuesday, the S&P 500 rose 0.1% while the Dow industrials climbed 0.3%. The Nasdaq composite barely budged, closing less than 0.1% higher. Small company stocks outdid the broader market, lifting the Russell 2000 index 0.5%. – – Kurtenbach reported from Bangkok; Ott reported from Washington. 27-26
