Stocks slip as Wall Street heads for another losing week
By Elaine Kurtenbach And Matt Ott, The Associated Press on February 17, 2023.
NEW YORK (AP) – Stocks are falling again on Wall Street, on track for their first back-to-back weekly drop since the turn of the year. The S&P 500 was 0.5% lower in early trading Friday, a day after sliding to its worst loss in four weeks on worries that inflation isn’t slowing as quickly and as smoothly as hoped. The Dow and the Nasdaq composite also fell. Stocks have hit turbulence in February after shooting higher in January on hopes that cooling inflation could get the Federal Reserve to take it easier on interest rates and that the economy could avoid a severe recession. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street is poised to extend its slide Friday, one day after U.S. markets suffered their biggest drop in a month on an inflation reading that came in hotter than expected. Futures for the Dow Jones industrials slid 0.5% and the S&P 500 dipped 0.7%. Oil prices fell more than 3%. The S&P 500 lost 1.4% Thursday following news that inflation at the wholesale level slowed less than economists had expected. That hot reading echoed inflation data earlier in the week at the consumer level that suggests inflation isn’t falling as steadily has was hoped, though Fed Chair Jerome Powell has warned of an uneven return to more normal levels of inflation. Stocks have gyrated on worries that persistently high inflation will push the Federal Reserve to get even more aggressive on interest rates. Higher rates tend to cool inflation, but they also raise the risk of recession of spending trails off too much. “Continued strength in the inflation data suggests the Fed’s work is still not finished, and risks of a longer cycle are rising,” Stephen Innes of SPI Asset Management said in a report. In Europe at midday, Germany’s DAX sank 0.9%, the CAC 40 in Paris gave up 0.7% and Britain’s FTSE 100 slipped 0.3%. In Asian trading, Tokyo’s Nikkei 225 fell 0.7% to 27,513.13 and the Kospi in South Korea sank 1% to 2,450.20. Hong Kong’s Hang Seng lost 1.3% to 20,836.08. Losses were amplified by news that a major tech industry dealmaker, Bao Fan, apparently has gone missing. Shares in one of China’s top investment banks, China Renaissance, plunged Friday after the company said in a filing to Hong Kong’s stock exchange that it had lost touch with Bao, its founder. Bao’s disappearance follows a crackdown on technology companies in the past two years that officials in China said had been wrapped up. The Shanghai Composite index gave up 0.8% to 3,224.02 and Australia’s S&P/ASX 200 shed 0.9% to 7,346.80. Taiwan’s benchmark lost 0.5%. Bangkok’s SET index fell 0.7% after the government reported the economy grew at a meager 2.6% annual pace in 2022. On Thursday, the Dow Jones Industrial Average lost 1.3%, while the Nasdaq composite dropped 1.8%. Thursday’s inflation report showed that prices at the wholesale level were 6% higher last month than a year earlier, slower than December’s rate but worse than expected. Perhaps more concerning was that inflation accelerated in January on a month-to-month basis even after stripping out prices for food, energy and other layers. The inflation report darkened the mood on Wall Street along with a batch of other data painting a mixed picture of the economy. Fewer workers applied for jobless benefits last week than expected, suggesting that layoffs remain low across the economy. That’s good news for workers and another signal of strength for the job market, but the Fed worries it could also add upward pressure on inflation. Loretta Mester, president of the Federal Reserve Bank of Cleveland, said in a speech Thursday that she saw “a compelling economic case” at the Fed’s meeting earlier this month to raise rates by twice the 25 basis points it ended up implementing. In other trading Friday, U.S. benchmark crude oil lost $2.73 to $75.76 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing basis, gave up $2.82 to $82.32 per barrel. The dollar rose to 134.78 Japanese yen from 133.99 yen. The euro slipped to $1.0620 from $1.0673. – – – Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md. 22-21
