Stock market today: Wall Street drifts as yields ease on cooler economic data
By Elaine Kurtenbach And Matt Ott, The Associated Press on May 30, 2024.
NEW YORK (AP) – U.S. stocks are drifting following mixed profit reports from big companies and signals that the economy may be cooling. The S&P 500 was down 0.3% in early trading Thursday and has been generally pulling back since setting a record last week. The Dow Jones Industrial Average was down 362 points, and the Nasdaq composite was 0.3% lower. Salesforce was the main reason for the Dow’s sharp drop. It tumbled after reporting weaker revenue for the latest quarter than analysts expected. Treasury yields eased in the bond market following weaker-than-expected reports on the job market and overall economy. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street stumbled again early Thursday as hopes for interest rate cuts slowly fade with the Federal Reserve seemingly resolute in its mission to curb inflation. Futures for the S&P 500 slipped 0.4% before the bell, while Dow Jones Industrial Average futures sank 0.9%. There’s been little economic data this week to distract investors from Fed officials’ recent hawkish comments regarding rates and inflation, at least until Friday when the U.S. consumer spending report comes out. The report contains a measure of inflation preferred by the Fed and investors are hoping it shows that inflation has retreated closer to the Fed’s 2% target. Stubborn inflation has quashed what had clearly been overly optimistic forecasts for several rate cuts this year. “Hotter and stickier than expected global inflation appears to be taking the air out of asset markets,” Mizuho Bank said. “In other words, “Goldilocks” coming undone. And worries about adverse demand impact from higher rates seeping through.” Lower interest rates can fuel for equities markets. Until there’s more reason to believe a drawdown in rates is imminent, anxiety will likely remain elevated on Wall Street. Rising bond yields have also weighed on markets this week, though they settled modestly lower early Thursday. The yield on the 10-year ticked down to 4.59% from 4.62% late Wednesday, while the 2-year yield fell to 4.96% from 4.98%. The Fed is trying to pull off the balancing act of slowing the economy just enough through high interest rates to get inflation fully under control, but not so much that it leads to widespread layoffs. The government’s most recent weekly layoffs report comes later this morning. In premarket trading Thursday, software maker Salesforce skidded more than 15% after it posted first-quarter sales that fell short of Wall Street expectations. The maker of business communications software Slack also issued tepid second-quarter guidance. Clothing retailer Kohl’s was getting hammered after surprising investors with a 24 cents-per-share loss in the first quarter when investors were expecting a profit of 5 cents per share. It’s shares tumbled more than 22% after it missed sales targets and cut guidance. Computer and printer maker HP jumped 5.8% on a strong earnings report, while clothing retailer American Eagle Outfitters slumped 8.5% after missing sales targets in its most recent quarter. In Europe, the CAC 40 in Paris rose 0.2%, while Britain’s FTSE gained 0.4%. Germany’s DAX was largely unchanged. Asian shares tracked Wednesday’s pullback on Wall Street, with Tokyo’s Nikkei 225 benchmark closing down 1.3% at 38,054.13. The Hang Seng in Hong Kong declined 1.3% to 18,230.19. The Shanghai Composite index gave up early gains, losing 0.6% to 3,091.68. Australia’s S&P/ASX 200 slipped 0.5% to 7,628.20, while the Kospi in Seoul sank 1.6% to 2,635.44. Taiwan’s Taiex lost 1.4% and India’s Sensex was 0.7% lower. In the energy market, U.S. benchmark crude oil was flat at $79.23 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, declined 10 cents to $83.33 per barrel. The U.S. dollar slipped to 156.73 Japanese yen from 157.65 yen. The euro rose to $1.0819 from $1.0803. On Wednesday, the S&P 500 dipped 0.7%, trimming its gain for May, which had been on track to be its best month since November. Four out of every five stocks in the index dropped. The Dow industrials lost 1.1% and the Nasdaq composite slipped 0.6%. 26-25
