Wall Street opens lower ahead of more earnings reports

By Joe Mcdonald And Matt Ott, The Associated Press on February 6, 2023.

NEW YORK (AP) – Stocks are opening lower on Wall Street as markets face more earnings reports from big U.S. companies. A surprisingly strong jobs report last week fanned worries that the Federal Reserve may have much more work to do in cooling the economy to get inflation under control. Tyson Foods slumped 5% after the poultry producer’s profit came in well short of analysts’ forecasts. The S&P 500 fell 0.6% early Monday, and the Nasdaq composite gave up 0.7%. The Dow fell 0.5%. Later this week entertainment giant Disney will report its latest results. The yield on the two-year Treasury rose to 4.41%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street continued to reel before markets opened on Monday after strong U.S. jobs data last week fanned fears of more interest rate hikes.

Futures for the benchmark S&P 500 index slipped 0.7% before the bell, while futures for the Dow Jones Industrial Average lost 0.5%.

U.S. employers hired twice as many people in January as the previous month and wages rose, official data showed Friday. That was good news for workers but dampened hopes the Federal Reserve might decide no more rate increases are needed to slow economic activity.

The numbers “look set to inevitably burst the bubble on Fed pivot bets” because they “suggest a re-acceleration in wage pressures,” said Tan Boon Heng of Mizuho Bank in a report.

Shares of Tyson Foods tumbled nearly 5% after the poultry producer’s profit came in well short of Wall Street targets.

On Friday, the S&P 500 fell 1% after the government reported the economy added 517,000 jobs in January. That was double December’s 260,000 and more than double the 185,000 expected by economists.

Average hourly wages were 4.4% higher in January than a year earlier. That was lower than December’s 4.8% raise but above expectations. Central bankers worry wage growth may push up consumer prices.

The data dampened investor hopes that lower inflation might persuade the Fed and other central banks to ease off plans for more rate increases. They worry central bankers might be willing to tip the global economy into recession to stop inflation that is near multi-decade highs.

Some traders expect the Fed to cut rates late this year, despite warnings by officials that more increases are planned. Officials of the European Central Bank have issued similar warnings.

Despite that, the S&P 500 turned in its fourth weekly gain in the past five. It is 15.6% above its low point in October.

The Dow Jones Industrial Average dropped 0.4% and the Nasdaq composite sank 1.6%.

In midday trading in Europe, the FTSE 100 in London lost 0.8%, while the DAX in Frankfurt shed 1% and the CAC 40 in Paris tumbled 1.4%.

In Asia, the Shanghai Composite Index fell 0.8% to 3,237.69 while the Nikkei 225 in Tokyo advanced 0.7% to 27,693.65. The Hang Seng in Hong Kong sank 2% to 21,222.16.

The Kospi in Seoul declined 1.7% to 2,438.19. Sydney’s S&P-ASX 200 retreated 0.3% to 7,539.00.

India’s Sensex lost 0.5% to 60,555.91. Southeast Asian markets declined. New Zealand markets were closed for a holiday.

In energy markets, U.S. benchmark crude gained 57 cents to $73.96 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.49 on Friday to $73.39. Brent crude, the price basis for international oil trading, advanced 82 cents to $80.76 per barrel in London. It lost $2.23 the previous session to $79.94.

The dollar rose to 131.95 yen from Friday’s 131.07 yen. The euro fell to $1.0784 from $1.0805.

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McDonald reported from Beijing; Ott reported from Silver Spring, Md.

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