Wall Street opens mixed and is headed for a losing week
By Joe Mcdonald And Matt Ott, The Associated Press on January 20, 2023.
NEW YORK (AP) – Stocks are off to a mixed start on Wall Street, keeping the market on track for a losing week after rallying for the first two weeks of the year. The S&P 500 was just barely higher in the early going Friday, and the tech-heavy Nasdaq composite was up 0.4%. The Dow slipped 0.1%. Netflix jumped 8% after reporting a surge in subscribers, while Google parent Alphabet rose 3% after saying it would cut 12,000 jobs, or 6% of its staff, joining other tech giants in contracting as the boom the industry rode during the height of the COVID-19 pandemic ebbs. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Premarket trading on Wall Street is mixed Friday as recession fears threaten to drag major indexes to their first weekly decline of the year. Futures for the Dow are flat after early declines, while the S&P 500 is up 0.3%. The Dow is down almost 4% this week, the S&P is down 2.5%, and the tech heavy Nasdaq composite is down 2% this week amid tens of thousands of layoffs across the sector. Growing concern that the Federal Reserve and other central banks will keep interest rates elevated for an extended period – even if it means letting major economies slip into recession – has gripped markets this week. In separate appearances Thursday, Fed board member Lael Brainard and European Central Bank President Christine Lagarde affirmed plans to maintain heightened interest rates despite hints that inflation and economic growth is cooling. “That again implies more hikes to come and then a long hiatus, not the imminent reversal markets are pricing for,” Rabobank said in a report. Recent economic data has shown weakness in the U.S. housing industry and manufacturing in the mid-Atlantic region, though they weren’t as bad as expected and the job market appears healthy. Those followed worse readings than expected Wednesday on retail sales, a cornerstone of the economy, and industrial production. Some economists expect a U.S. recession this year but most expect that if it does occur, it will be brief. The Fed’s key lending rate is 4.25% to 4.50%, up from close to zero one year ago. Its next rate decision will be announced Feb. 1. Analysts expect an increase of 0.25 percentage points, smaller than previous hikes of up to 0.75 percentage points. Job cuts in the technology sector continued Friday, with Google parent company Alphabet announcing that it was laying off 12,000 workers. Earlier this week, Microsoft announced 10,000 job cuts, or nearly 5% of its workforce. Amazon is cutting 18,000 jobs and Facebook parent Meta is shedding 11,000 positions. Other tech companies have also announced staff reductions that come after rapid expansion in the sector during the pandemic. It wasn’t all bad news for tech, as Netflix said it had a surge of 7.7 million subscribers in the fourth quarter, sending its stock up close to 7% in premarket. Japan reported that its consumer inflation rate hit 4% in December, its highest level in 41 years. The high reading may add to pressures on the Bank of Japan to alter its longstanding policy of keeping its key interest rate at an ultra-low level of minus 0.1%. But economists expect price pressures to ease in coming months since as inflation elsewhere declines. At midday in Europe, the FTSE 100 in London gained 0.3%, while Frankfurt’s DAX rebounded from early losses to gain 0.5%. The CAC 40 in Paris climbed 0.7%. In Asia, the Shanghai Composite Index rose 0.7% to 3,253.82 and the Nikkei 225 in Tokyo advanced 0.6% to 26,553.53. The Hang Seng in Hong Kong added 1.8% to 22,044.65. The Kospi in Seoul advanced 0.6% to 2,395.26 and Sydney’s S&P-ASX 200 added 0.2% to 7,452.20. India’s Sensex shed 0.3% to 60,697.04. New Zealand and Southeast Asian markets rose. In energy markets, benchmark U.S. crude advanced 34 cents to $80.67 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price benchmark for international oil trading, gained 54 cents to $86.70 per barrel in London. The dollar gained to 130.12 yen from Thursday’s 128.44 yen. The euro ticked down to $1.0825 from $1.0831. On Thursday, the S&P 500 and Dow both lost 0.8% in their third daily decline. The tech-heavy Nasdaq tumbled 1% to 10,852.27. More than 75% of the stocks in the S&P 500 closed lower. – – McDonald reported from Beijing; Ott reported from Washington. 25-24
