Stock market today: Wall Street opens higher after a rare winning week
By Yuri Kageyama And Matt Ott, The Associated Press on August 28, 2023.
NEW YORK (AP) – Stocks are opening higher on Wall Street as markets shift their attention from the Federal Reserve to more corporate earnings and economic reports. The S&P 500 was up 0.7% in early trading Monday. The Dow rose 274 points, or 0.8%, and the Nasdaq composite added 0.8%. U.S. stocks broke a three-week losing streak last week as investors appeared relieved that Federal Reserve Chair Jerome Powell said the central bank would “proceed carefully” on interest rates. 3M jumped following reports that the company had agreed to a $5.5 billion settlement over faulty earplugs, a lower figure than expected. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street is poised for a modestly higher open Monday as attention shifts from the Federal Reserve to more corporate earnings and new economic data that could provide clues about the health of the U.S. economy. Futures for the Dow Jones industrials rose 0.3% and the S&P 500 inched up 0.2% before the opening bell. Wall Street appeared to break out of a slump Friday after Federal Reserve Chair Jerome Powell said the nation’s central bank will “proceed carefully” on interest rates. “The muted reaction of treasury yields to the rhetoric from Jackson Hole shows that U.S. Federal Reserve chairman Jerome Powell probably hit the right tone when it comes to keeping further policy tightening on the table but at the same time not rattling market confidence,” said Tim Waterer, chief market analyst at KCM Trade. In a highly anticipated speech, Powell said Friday that the Federal Reserve will base upcoming interest rate decisions on the latest data about inflation and the economy. He said while inflation has come down from its peak, it’s still too high and the Fed may raise rates again, if needed. Some market watchers had hoped Powell would say the Fed was done with its hikes to interest rates. Higher rates work to control inflation, but at the cost of slowing the economy and hurting prices for investments. But Powell also took care to say he’s aware of the risks of going too far on interest rates and doing “unnecessary harm to the economy.” Altogether, the comments weren’t very different from what Powell said before, analysts said. The Fed has already hiked its main interest rate to the highest level since 2001 in its drive to grind down high inflation. That was up from virtually zero early last year. The higher rates have sent the manufacturing industry into contraction and helped cause three high-profile U.S. bank failures, while also helping to slow inflation. Market-moving economic reports this week include consumer confidence, a second gross domestic product estimate, a flurry of job market data and a consumer spending report that includes a closely watched measure of inflation. Companies reporting quarterly earnings this week include Best Buy, Salesforce and Dollar General. Shares in 3M jumped more than 6% in premarket Monday after multiple news outlets reported the company had agreed to a $5.5 billion settlement over faulty earplugs, a much lower figure than many had expected. At midday in Europe, France’s CAC 40 added 0.8% and Germany’s DAX rose 0.6%. Trading was closed in Britain for a bank holiday. Moody’s Analytics said in a report that prospects for a rapid rebound in Asia was not to be expected, despite signs that “the global electronics cycle has bottomed out,” with chips sales stabilizing. “The AI boom has boosted demand for high-end chips, but end-user demand for smartphones and PCs remains weak,” said the report authored by senior economics Stefan Angrick and associate economists Dave Chia and Jeemin Bang. “China’s lackluster recovery and reduced electronics demand from the U.S. and Europe add to the subdued outlook.” Troubled Chinese real estate developer Evergrande Group slid to a 78% loss on its first day back after trading in the company was suspended in March of 2022. Evergrande has $340 billion in debt and has asked a U.S. court to approve a restructuring plan for foreign bondholders. Japan’s benchmark Nikkei 225 added 1.7% to finish at 32,169.99. Australia’s S&P/ASX 200 gained 0.6% to 7,159.80, after data on Australian retail sales showed they rose a higher than expected 0.5%. South Korea’s Kospi rose nearly 1.0% to 2,543.41. Hong Kong’s Hang Seng jumped 1.0% to 18,130.74, while the Shanghai Composite surged 1.1% to 3,098.64. In energy trading, benchmark U.S. crude edged up 5 cents to $79.88 a barrel. Brent crude, the international standard, lost 10 cents to $83.84 a barrel. In currency trading, the U.S. dollar rose to 146.53 Japanese yen from 146.40 yen. The euro cost $1.0810, up from $1.0798. – – Kageyama reported from Tokyo; Ott reported from Silver Spring, Md. 26-25
