Wall Street opens higher as some calm returns after the market’s worse loss in almost 2 years
By Elaine Kurtenbach And Matt Ott, The Associated Press on August 6, 2024.
NEW YORK (AP) – Some calm is returning to Wall Street in early trading, and Japan’s stock market soared to bounce back from its worst loss since 1987. The S&P 500 was 0.6% higher early Tuesday and on track to break a scary three-day losing streak. The benchmark index had tumbled a bit more than 6% after several weaker-than-expected reports, including a sharp slowdown in hiring by U.S. companies, raised worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy. The Dow Jones Industrial Average was up 48 points and the Nasdaq composite was up 0.8%. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Wall Street appears poised to return to less chaotic trading Tuesday after a huge sell-off to start the week. Japan’s benchmark Nikkei 225 index soared more than 10%, regaining almost all of the Monday losses that triggered a cascade of tumbling markets from Europe to North America. Futures for the S&P 500 rose 0.8% and futures for the Dow Jones Industrial Average gained 0.7%. The technology-laden Nasdaq, which tumbled more than 2% on Thursday and Friday, and another 3.4% to start the week, climbed 0.9%. “Calm finally appears to be returning,” wrote Bas van Geffen of Rabobank. The Nikkei’s 10% gain didn’t make up for Monday’s loss, he said, “but at least it takes some of the “˜panic’ out of the selling.” A strong raft of U.S. corporate earns are also supporting markets early. Ride-hailing app Uber jumped 5.5% after it crushed Wall Street’s profit expectations on its biggest revenue quarter ever. Uber posted sales of $10.7 billion in the second quarter, the second straight period of $10 billion-plus sales. Caterpillar shares rose more than 4% after the heavy machinery manufacturer beat profit expectations. The Irving, Texas company’s shares are up more than 8% in 2024. However, shares of SunPower Corp., a onetime solar giant that had a market capitalization of more than $11 billion, tumbled before the opening bell after announcing it would seek bankruptcy protection. The San Jose, California, company filed for Chap. 11 bankruptcy protection late Monday and said it had an agreement with Solaria to sell some of its assets for about $45 million. Its shares, which began the year close to $5 each, fell more than 40% to just 47 cents before the opening bell. Elsewhere, European markets were mostly left out of the rebound, with Germany’s DAX and London’s FTSE 100 each down 0.2% at midday. The CAC 40 in Paris was 0.5% lower. Those modest declines and gains in Asia suggested a respite from the anxious selling of the past two trading sessions, when the Nikkei lost a combined 18.2% and other markets also swooned. Monday’s plunge was reminiscent of a crash in 1987 that swept around the world pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy. The Nikkei gained nearly 11% early Tuesday and bounced throughout the day to close up 3,217.04 points at 34,675.46 as investors snapped up bargains after the 12.4% rout of the day before. The dollar rose to 145.16 yen from 144.17 yen. The yen’s rebound against the dollar after the Bank of Japan raised its main interest rate on July 31 was one factor behind the recent market swings, as investors who had borrowed in yen and invested in dollar assets like U.S. stocks sold their holdings to cover the higher costs of those “carry trade” deals. Elsewhere in Asia, South Korea’s Kospi jumped 3.3% to 2,522.15. It had careened 8.8% lower on Monday. Hong Kong’s Hang Seng index gave up early gains to close 0.3% lower at 16,647.34. The Shanghai Composite index, largely bypassed by Monday’s drama, rose 0.2% to 2,867.28. In Australia, the S&P/ASX 200 advanced 0.4% to 7,680.60 as the central bank kept its main interest rate unchanged. Taiwan’s Taiex was up 1.2% after plunging 8.4% the day before and the SET index in Bangkok gained 0.3%. On Monday, the S&P 500 dropped 3% for its worst day in nearly two years. The Dow declined 2.6% and the Nasdaq composite slid 3.4%. The global sell-off that began last week and gained momentum after a report Friday showed that American slowed their hiring in July by much more than economists expected. That and other weaker than expected data added to concern the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation. But sentiment was helped by a report Monday by the Institute for Supply Management said growth for U.S. services businesses was a touch stronger than expected, led by the arts, entertainment and recreation sectors, along with accommodations and food services. The U.S. economy is still growing, so a recession is far from certain. The U.S. stock market is still up a healthy amount for the year, with double-digit percentage gains for the S&P 500, the Dow and the Nasdaq. Markets have romped to dozens of all-time highs this year, in part due to a frenzy around artificial-intelligence technology and critics have been saying prices looked too expensive. Other worries also are weighing on the market. The Israel-Hamas war and other global hotspots could cause sharp swings for the price of oil. Early Tuesday, U.S. benchmark crude oil was up 6 cents at $73 per barrel. Brent crude, the international standard, picked up 3 cents to $76.33 per barrel. The euro fell to $1.0918 from $1.0954. 28-27
