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US Stocks Mixed Near Record Highs 10/12 15:31
Wall Street kicked off a busy week on Monday with a mixed finish for the
major U.S. stock indexes, although the market remained near its all-time high.
(AP) -- Wall Street kicked off a busy week on Monday with a mixed finish for
the major U.S. stock indexes, although the market remained near its all-time
high.
The S&P 500 slipped 0.1% after wavering between small gains and losses. The
benchmark index set a record high on Friday and is up 14% so far this year.
The Dow Jones Industrial Average rose 0.4%, and the Nasdaq composite fell
0.4%.
Shares in roughly 64% of the companies in the S&P 500 rose, led by
communication services stocks. Meta Platforms rose 3.4%, T-Mobile added 2.2%,
AT&T gained 1.4% and Verizon Communications rose 2.7%.
Energy stocks had some of the biggest gains as oil prices kept rising.
Chevron rose 1.4%.
Despite those gains, a slide in big technology stocks dragged the market
into the red.
Micron Technology fell 3.9%, Advanced Micro Devices dropped 2.3%, Broadcom
slid 1.9% and Nvidia gave up 1.3%. They are among several companies in the
sector with big stock values that tend to have a heavy influence on the market.
They have also been the driving force behind the broader market's record gains
throughout the year.
Those companies could face more scrutiny from investors during this round of
corporate earnings as Wall Street tries to get a better sense of whether the
stock gains made during the frenzy over artificial intelligence can translate
into future growth.
"AI continues to support growth, reinforcing the outlook for tech and
critical suppliers across the supply chain," wrote Magdalena Ocampo, market
strategist at Principal Asset Management, in a report. "Yet uncertainty about
AI's long-term impact persists, making future gains more reliant on earnings
delivery rather than potential."
Stocks are reaching for records often because of the tech sector, but remain
very volatile on a daily basis, partly because of big shifts in oil prices and
their impact on bond yields and inflation.
The price of Brent crude, the international standard, rose 1.8% to settle at
$106.65 per barrel. Prices have been swinging between $96 and nearly $110 over
the last month over uncertainty about the U.S. war with Iran and its continued
impact on global energy supplies and inflation.
Prices jumped despite President Donald Trump's announcement on social media
Friday that he struck a deal to buy Russian diesel with Russian President
Vladimir Putin, aiming to tamp down a spike in fuel prices ahead of the Nov. 3
U.S. midterm elections. The plan, though, runs counter to U.S. efforts to cut
the flow of money Russia gets from oil and gas sales that can be used to pay
for its war against Ukraine.
Higher oil prices have been driving gasoline prices higher. That's a direct
hit to many people's wallets, as gasoline is usually a necessary expense. The
rise in diesel is more indirect, raising the costs for just about any shipped
product, which usually results in higher prices for everything from food to
clothing.
The surge in energy prices and its impact on the broader economy will be a
key focus this week as Wall Street reviews several important economic updates.
They include fresh data on the housing market, inflation and retail sales.
The big updates this week involve reports about inflation hitting consumers
and businesses. On Wednesday, the government will release the closely-watched
consumer price index, or CPI, which measures price changes for a wide range of
products and services. Economists expect the index to show the rate of
inflation worsened to 3.6% in September from 3.4% in August.
A report on inflation called the producer price index will be released on
Thursday and is also expected to show that inflation remains stubbornly high.
It measures inflation faced by businesses before it hits consumers.
An update on how consumers are reacting to high prices will be released on
Thursday. Economists expect the report on retail sales for September to show
that households pulled back on spending.
The rate of inflation by any measure remains well above the Federal
Reserve's target rate of 2%. That prompted the central bank to raise its
benchmark interest rate at its last meeting in an effort to cool inflation.
Wall Street expects another rate hike before the year ends.
Inflation and expectations for high interest rates have been driving
Treasury yields higher in the bond market. The 10-year Treasury yield, which
influences mortgage rates, recently touched its highest level since 2002. It
has since eased a bit and stood at 5.24% late Friday. U.S. bond trading was
closed Monday for the Columbus Day holiday.
Higher mortgage rates have been weighing on the housing market and Wall
Street will get an update on home sales on Tuesday.
The latest round of corporate earnings updates ramps up this week with
financial results from banks. Citigroup, JPMorgan Chase and Wells Fargo will
report their results on Tuesday and Bank of America will report its results on
Wednesday. They have been reporting record profits throughout the year and Wall
Street expects more of the same for the latest quarter.
Markets in Europe gained ground and markets in Asia were mostly lower.
Markets in Tokyo were closed for a holiday.
All told, the S&P 500 fell 4.30 points to 7,807.24. The Nasdaq dropped
120.27 points to 27,245.90. The Dow gained 195.60 points to close at 51,850.55.
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