April 21st, 2024

Stock market today: Wall Street climbs to more records as bond yields ease

By Stan Choe, The Associated Press on March 1, 2024.

FILE - Pedestrians pass the New York Stock Exchange, Monday, Oct. 4, 2021, in the Manhattan borough of New York. (AP Photo/John Minchillo, File)

NEW YORK (AP) – Wall Street added to its records as U.S. stocks closed out another winning week. The S&P 500 rose 0.8% Friday. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq composite rose 1.1%. More leaps for Dell and other companies on excitement around artificial-intelligence technology helped drive the market. Dell soared more than 31%. New York Community Bancorp lost a quarter of its value after warning investors that it found serious weaknesses in how it reviews loans. Treasury yields eased following weaker-than-expected reports on U.S. manufacturing and consumer sentiment. The yield on the 10-year Treasury note fell to 4.18%.

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

NEW YORK (AP) – Wall Street is adding to its records Friday as U.S. stock indexes climb toward another winning week.

The S&P 500 was 0.8% higher in late trading after setting an all-time high the day before. It’s heading for its 16th winning week in the last 18.

The Dow Jones Industrial Average was up 72 points, or 0.2%, with less than an hour remaining in trading. The Nasdaq composite was 1.2% higher a day after surpassing its prior record set in 2021.

In the bond market, Treasury yields eased after reports on manufacturing and sentiment among U.S. consumers came in weaker than economists expected. The data reinforced bets that the Federal Reserve may begin cutting interest rates in June, particularly after a report on Thursday showed a key measure of inflation behaved pretty much as expected last month.

Dell Technologies was helping to support the stock market after jumping 31.4%. It reported stronger profit and revenue for the latest quarter than analysts expected, highlighting demand for its AI-optimized servers.

A seemingly never-ending crescendo of demand for artificial-intelligence technology has helped catapult stocks higher over the last year. Dell has shot up roughly 205% in the last 12 months, while Nvidia has surged 260%.

NetApp leaped 20.2% after reporting stronger results than expected, saying it’s seeing “good momentum in AI.” The data company also gave a forecasted range for profit in the current quarter that topped what several analysts were expecting.

The mood was much more dour in the banking industry, where New York Community Bancorp tumbled 25.6%. It warned investors late Thursday that it found weakness in how it internally reviews loans, caused by ineffective oversight, risk assessment and monitoring activities.

The company said it won’t be able to file its annual report in time, and it took a charge worth $2.4 billion against its results for the last three months of 2023. Its CEO stepped down after 27 years with the company, effective immediately.

Much attention has been on smaller regional banks after last year’s crisis in the industry led to the collapses of several. One of them, Signature Bank, was swallowed up by NYCB, which has caused the resulting bank to face stricter oversight amid struggles for loans tied to real estate.

While NYCB faces many issues that are specific to it, the worry has been that banks across the industry face challenges from loans made for real-estate projects.

Interest rates are high after the Federal Reserve hiked its main rate to the highest level since 2001, which adds pressure on the financial system. The hope has been that the Fed will cut interest rates several times this year to relieve some of that pressure on banks and the broader economy.

The Fed has indicated it may do so if inflation continues to cool decisively toward its 2% target. But a string of stronger reports on the economy than expected have forced traders on Wall Street to push back forecasts for when the cuts could begin. The hope now is that the Fed could start in June after traders shelved earlier expectations for March.

Hopes for a June cut held after a report showed the U.S. manufacturing industry shrank in February for a 16th straight month. Manufacturing has been one of the weakest-performing areas of the economy, while a resilient job market and spending by U.S. consumers have propped it up. The report from the Institute for Supply Management also said prices paid by manufacturers for raw materials rose again, but at a slower pace than in January.

A separate report from the University of Michigan said sentiment among U.S. consumers was weaker than economists expected. It slipped in February from January but held most of the gains seen in recent months. That’s important because spending by U.S. consumers makes up the bulk of the economy.

In the bond market, Treasury yields sank following the reports. The yield on the 10-year Treasury fell to 4.18% from 4.25% late Thursday and from 4.28% just before the data’s release.

The two-year Treasury yield, which more closely tracks expectations for the Fed, sank to 4.53% from 4.62%.

Economists at Deutsche Bank expect the Fed to cut its main interest rate by 1 percentage point this year, down from its current level of 5.25% to 5.50%. Like many traders, they also expect the Fed to start in June.

But chief U.S. economist Matthew Luzzetti also says there are several reasons to be cautious about cuts. One is that stock prices have already rallied and Treasury yields have already sunk on expectations for coming cuts, which loosens conditions for the economy and could add upward pressure on inflation.

In stock markets abroad, Japan’s Nikkei 225 jumped 1.9%. Indexes were up more modestly across the rest of Asia and Europe.

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AP Writers Matt Ott and Zimo Zhong contributed.

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