NATIONAL NEWS

Stock market today: Asian markets extend losses after Wall Street drifts lower

Jul 4, 2023, 10:31 PM | Updated: Jul 5, 2023, 9:44 pm

FILE - The New York Stock Exchange on Wednesday, June 29, 2022 in New York. (AP Photo/Julia Nikhins...

FILE - The New York Stock Exchange on Wednesday, June 29, 2022 in New York. (AP Photo/Julia Nikhinson, File)
Credit: ASSOCIATED PRESS

(AP Photo/Julia Nikhinson, File)

BANGKOK (AP) — Shares slipped in Asia on Thursday after Wall Street drifted downward following a rally that sent it roaring 16% higher for the year so far.

Hong Kong’s Hang Seng index dropped 3% on heavy selling of Chinese banks shares after Goldman Sachs downgraded them citing concerns about the slowing economy and lenders’ exposures to debt. Japan’s Nikkei 225 lost 1.7%. U.S. futures declined and oil prices were mixed.

Share prices had soared recently amid signs the U.S. economy is stronger than had been feared, fending off recession so far despite high interest rates. Minutes from the Federal Reserve’s latest policy meeting released Wednesday showed that some central bank officials wanted to raise rates in mid-June, though in the end they voted unanimously to keep rates steady.

The threat of further rate hikes has been weighing on investor sentiment. The next focus for the U.S. will be jobs data due out on Friday.

Markets are also watching for updates on tensions between the U.S. and China as Treasury Secretary Janet Yellen heads to Beijing for several days of meetings.

The Hang Seng shed 587 points to 18,522.43 while the Shanghai Composite index lost 0.5% to 3,205.97. Tokyo’s Nikkei 225 index gave up more than 600 points to 32,729.96.

In Australia, the S&P/ASX 200 dropped 1.3% to 7,160.70 and the Kospi in Seoul lost 0.7% to 2,560.14. India’s Sensex opened marginally higher while shares fell in Taiwan and Bangkok.

On Wednesday, the S&P 500 slipped 0.2% to 4,446.82, edging down from its highest level since April 2022. The Dow fell 0.4% to 34,288.64 and the Nasdaq gave back 0.2% to 13,791.65.

A report on Wednesday showed growth for U.S. factory orders held steady in May, though economists expected to see an acceleration.

On Wall Street, shares of UPS fell 2.1% as the company tries to reach a deal with the Teamsters union representing about 340,000 of its workers. Their current contract expires at the end of the month, and Teamsters members last month voted in favor of a strike authorization.

Companies that do a lot of business in the China region were also weak. Las Vegas Sands and Wynn Resorts, which get significant chunks of revenue from Macau, both fell at least 4.6%.

On the winning side was Meta Platforms. The parent company of Facebook, Instagram and WhatsApp looks poised to unveil a new app that appears to mimic Twitter. It rose 1.9%, adding to a stellar year where it’s already soared 144.6%.

Hope is rising that inflation is cooling enough to get the Federal Reserve to soon stop its hikes to rates, which undercut inflation by slowing the entire economy. Much of Wall Street expects the Fed to raise rates later this month and perhaps once more later this year, as the Fed has been hinting.

That could leave the U.S. stock market stuck in a holding pattern as everyone waits to see if a long-predicted recession does happen or not. The upcoming earnings reporting season could offer some clues, with companies telling investors how much profit they earned during the spring.

Yields were mixed in the bond market. The yield on the 10-year Treasury rose to 3.93% from 3.86% Monday, when bond trading ended early ahead of the Independence Day holiday. The 10-year yield helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, held steady at 4.94%.

In other trading, U.S. benchmark crude oil shed 14 cents to $71.65 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday it gained $2 a gallon to $71.69 a barrel.

Brent crude, the pricing basis for international trading, gave up 28 cents to $76.37 a barrel.

The dollar fell to 144.17 Japanese yen from 144.64 yen. The euro dropped to $1.0839 from $1.0857.

___

AP Business Writer Stan Choe contributed.

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Stock market today: Asian markets extend losses after Wall Street drifts lower