People pass the New York Stock Exchange on Wednesday, March 13, 2024, in New York. Global shares are mixed in muted trading as optimism set off by a record rally on Wall Street gradually ran out of momentum. (AP Photo/Peter Morgan)
TOKYO – Stocks are drifting around their records in early trading following a batch of mixed data on the economy. The S&P 500 was up 0.2% Thursday. The Dow was up 115 points, and the Nasdaq composite was up 0.1%. Treasury yields ticked higher in the bond market after a report showed inflation was a touch hotter at the wholesale level last month than economists expected. It’s the latest in a string of worse-than-expected inflation data, which have kept the door closed on earlier hopes that the Federal Reserve could start cutting interest rates this month. Other reports showed some softening in the economy.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street pointed markedly higher early Thursday ahead of the government’s latest retail sales report and more data on inflation.
Futures for the Dow Jones Industrial Average jumped 0.4% before the bell, while futures for the S&P 500 added 0.3%
Economists are expecting that retail sales bounced back in February following January’s post-holiday slowdown in which sales declined 0.8% from the previous month. While some of that decline was attributed to weather, many economists suggested that consumers are starting to feel the pressure of higher interest rates and are tightening up their spending. Analysts forecast that retail sales grew 0.7% last month.
Retail sales are closely watched by economists because consumer spending makes up more than two-thirds of U.S. economic activity.
The Federal Reserve, which isn’t expected to start drawing down its benchmark interest rate until at least June, also watches the report closely. In its fight against inflation, the U.S. central bank has raised its benchmark borrowing rate to highest level in more than two decades. Fed officials will also have their eyes on the latest wholesale prices report coming later Thursday.
Oil prices have been on a general upswing so far this year, which has helped keep inflation a bit higher than economists expected. That higher inflation has in turn dashed Wall Street’s hopes that the Federal Reserve could start offering relief at its meeting next week by cutting interest rates.
But the expectation is still for the Fed to begin cutting rates in June, because the longer-term trend for inflation seems to remain downward. The Fed’s main interest rate is at its highest level since 2001, and reductions would release pressure on the economy and financial system.
Shares of U.S. Steel tumbled 4.7% in premarket as President Joe Biden is expected to formally declare opposition to the planned sale of U.S. Steel to Nippon Steel of Japan. In a statement to be released Thursday obtained in advance by The Associated Press, Biden said: “U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”
Nippon Steel announced in December that it planned to buy the Pittsburgh-based steel producer for $14.1 billion in cash, raising concerns about what the transaction could mean for unionized workers, supply chains and U.S. national security.
Shares of Anheuser-Busch InBev slumped 3.6% after Altria said it was selling a portion of its stake in the maker of Budweiser. Altria is offering up 35 million of its 197 million ABI shares.
In Europe at midday, France’s CAC 40 added 0.8%, Germany’s DAX gained 0.4% and Britain’s FTSE 100 was virtually unchanged.
Japan’s Nikkei 225 reversed course from earlier losses and finished at 38,807.38, up 0.3%. Nissan Motor Co. stock jumped 2.2% after an unconfirmed Japanese media report that the automaker behind the Leaf electric car was about to enter an agreement on EVs with domestic rival Honda Motor Co. Honda shares rose 1.1%.
Both Nissan and Honda declined comment.
Sydney’s S&P/ASX 200 slipped 0.2% to 7,713.60. South Korea’s Kospi added 0.9% to 2,718.76. Hong Kong’s Hang Seng lost 0.7% to 16,961.66, while the Shanghai Composite fell 0.2% to 3,038.23.
“In a significant turn of events, there’s increasing speculation that the Bank of Japan might consider ending its negative interest rate policy in its upcoming meeting, spurred by substantial wage hikes by major Japanese firms,” said Anderson Alves at ActivTrades.
The Japanese central bank has set a target of 2% inflation. The Bank of Japan will hold a two-day monetary policy meeting next week.
In energy trading, benchmark U.S. crude added 70 cents to $80.42 a barrel. Brent crude, the international standard, rose 60 cents to $84.63 a barrel.
In currency trading, the U.S. dollar relatively flat at 147.73 Japanese yen, down a tick from 147.74 yen. The euro cost $1.0940, down from $1.0953.
On Wednesday, the S&P 500 edged down 0.2%, a day after setting an all-time high. The Dow Jones Industrial Average rose 0.1%, and the Nasdaq composite fell 0.5%.
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