April 12th, 2024

Stock market today: Wall Street edges higher following its worst day in weeks

By Stan Choe, The Associated Press on April 3, 2024.

NEW YORK (AP) – Stocks closed mostly higher, as Wall Street steadied itself following its worst day in weeks. The S&P 500 rose 0.1% Wednesday, clawing back a bit of its loss from the prior day. The Dow Jones Industrial Average slipped 0.1%, and the Nasdaq composite added 0.2%. Treasury yields eased after a report said growth for U.S. services businesses cooled last month. That could keep the Federal Reserve on track to cut interest rates several times this year. Fed Chair Jerome Powell said again that the Fed will cut after getting more confirmation that inflation is heading down.

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

NEW YORK (AP) – U.S. stocks are mostly rising on Wednesday, as Wall Street steadies itself following its worst day in weeks.

The S&P 500 was 0.2% higher in late trading and clawing back a bit of its loss from the prior day. The Dow Jones Industrial Average was down 23 points, or 0.1%, with an hour remaining in trading, and the Nasdaq composite was 0.4% higher.

GE Aerospace jumped 7.2% for the biggest gain in the S&P 500. It’s the second day of trading for the company after splitting off its power and energy business to mark the end of the General Electric conglomerate. Cal-Maine Foods rose 4.1% after reporting stronger profit for the latest quarter than expected by selling a record number of eggs.

They helped offset a 7.5% drop for Intel, which disclosed financial details about key parts of its business for the first time, including its money-losing foundry business. The Walt Disney Co. fell 2.6% after shareholders voted against installing an activist investor to its board who had promised to shake up the company to lift its stock price.

Stocks have broadly slowed their roll since screaming 26% higher from November through March. Worries are rising that a remarkably resilient U.S. economy could prevent the Federal Reserve from delivering as many cuts to interest rates this year as earlier hoped. Critics have also been saying at least a pullback was overdue after stock prices had grown expensive by several measures.

The Fed has indicated it may still cut its main interest rate three times this year, which would relieve pressure on the economy. But Fed officials say they will do so only if more evidence arrives to show inflation is heading down toward their goal of 2%. Chair Jerome Powell reiterated that message in a speech on Wednesday, spelling out the risks of cutting rates either too early or too late.

What has Wall Street worried has been a litany of reports showing the economy remains stronger than expected. That is encouraging, of course, because it means the economy continues to avoid a recession, and it should provide support for corporate profits. But it could also add upward pressure on inflation and discourage the Fed from cutting rates.

Markets took encouragement from a report on Wednesday morning showing construction, retail and other U.S. services businesses continued to grow last month, but not by as much as economists expected. The report from the Institute from Supply Management also said an index of prices paid was at its lowest level since March 2020, an encouraging trend for inflation.

That calmed Wall Street’s nerves following a report earlier in the morning that markets found more discouraging. It suggested stronger gains than expected in hiring within the private sector. That report from the ADP Research Institute said employers accelerated their hiring last month, when economists were forecasting a slowdown.

A more comprehensive report on the job market for March will arrive from the U.S. government on Friday, and it will likely be the week’s headline economic data.

Traders have already drastically reduced their expectations for how many times the Federal Reserve will cut interest rates this year, halving them from a forecast of six at the start of the year.

Some investors are preparing for two or even zero cuts this year because the Fed may not want to begin lowering rates too close to November’s election out of fear of appearing political.

But the Fed’s Powell said Wednesday that the Fed has the independence that “both enables and requires us to make our monetary policy decisions without consideration of short-term political matters.” That could be a hint that it may make a move that some may see as uncomfortably close to the election.

In the bond market, yields fell. The 10-year yield slipped to 4.35% from 4.36% late Tuesday. The two-year yield, which more closely tracks with expectations for Fed action, fell to 4.67% from 4.70%.

In stock markets abroad, European indexes were mixed amid modest movements. A report showed inflation in Europe cooled by more than expected in March, but analysts say that might not be enough to move up the European Central Bank’s first cut to interest rates.

Asian markets fell more sharply earlier in the day, following up on Wall Street’s losses from Tuesday. Indexes fell 1.7% in Seoul, 1% in Tokyo and 1.2% in Hong Kong.

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AP writers Christopher Rugaber, Yuri Kageyama and Matt Ott contributed.

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