NATIONAL NEWS

Stock market today: Wall Street opens lower after pickup in wholesale inflation

Aug 10, 2023, 10:57 PM

The New York Stock Exchange is seen in New York, Thursday, Feb. 24, 2022. Markets are opening mostl...

The New York Stock Exchange is seen in New York, Thursday, Feb. 24, 2022. Markets are opening mostly higher on Wall Street Friday after a wild ride a day earlier. The S&P 500 added 0.4% in the early going, following even bigger gains in Europe. (AP Photo/Seth Wenig)
Credit: ASSOCIATED PRESS

(AP Photo/Seth Wenig)

Stocks are opening lower on Wall Street, keeping the market on track for its second losing week in a row. The early weakness Friday came after the government reported a slight increase in inflation in wholesale prices last month, indicating that the Federal Reserve’s work on bringing inflation to heel isn’t done. The S&P 500 was down 0.4% in the first few minutes of trading. The Dow was off 30 points, just less than 0.1%. The Nasdaq composite fell 0.6%. Big tech companies were among the biggest losers in the early going. Chipmaker Advanced Micro Devices fell 2.5%.

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

BEIJING (AP) — Global stock markets declined Friday after U.S. inflation edged higher, fueling unease about the outlook for the biggest global economy.

London, Shanghai, Paris and Hong Kong fell. Wall Street futures were mixed. Japanese markets were closed for a holiday. Oil prices edged lower.

Wall Street’s benchmark S&P 500 index gained less than 0.1% on Thursday after government data showed consumer prices rose 3.2% in July. That was higher than the previous month but below forecasts following repeated rate hikes to cool business activity and prices.

Traders hope the Federal Reserve will decide inflation that peaked above 9% last year is under control and no more interest rate hikes are needed.

Investors are watching whether higher interest expenses “will cause distress or defaults,” said Stephen Innes of SPI Asset Management in a report.

In early trading, the FTSE 100 in London lost 1% to 7,546.40. The CAC 40 in Paris fell 0.8% to 7,373.90 and the DAX in Frankfurt retreated 0.6% to 15,905.59.

On Wall Street, the S&P 500 future was off less than 0.1%. That for the Dow Jones Industrial Average was up 0.8%.

On Thursday, the Dow gained 0.2% and the Nasdaq composite added 0.1%.

U.S. inflation in July was up from the previous month’s 3% but below forecasts of 3.3%.

Beneath the surface, underlying trends for inflation were also within expectations.

The readings bolstered hopes among investors that the Federal Reserve’s anti-inflation campaign worked and no more rate hikes are needed. They hope the Fed can achieve a “soft landing” by cooling inflation without tipping the economy into recession.

In Asia, the Shanghai Composite Index lost 2% to 3,189.24 and the Hang Seng in Hong Kong fell 0.9% to 19,075.19.

The Kospi in Seoul declined 0.4% to 2,591.26 and Sydney’s S&P-ASX 200 sank 0.2% to 7,340.10.

India’s Sensex shed 0.4% to 65,419.62. New Zealand gained and Bangkok gained while other Southeast Asian markets declined.

Critics say Wall Street might have latched on too early to a belief that inflation is under control and the Fed’s rate-hiking cycle is finished. The Fed has said its decisions on possible additional increases will be based on inflation, hiring and other data.

The government is due to report wholesale inflation on Friday. More reports on inflation and hiring are due out before the Fed’s next meeting that ends Sept. 20.

Also Thursday, the government reported slightly more workers applied for unemployment benefits last week than expected. That might help to reassure the Fed that hiring, which has stayed unexpectedly strong, isn’t contributing to upward pressure on prices.

Big U.S. companies, meanwhile, are reporting mostly better profits than expected.

The Walt Disney Co. rose 4.9% after saying it would raise prices for some of its streaming services in hopes of boosting profitability. The entertainment giant reported stronger profit for the spring than analysts expected but weaker revenue.

Capri Holdings, which owns the Michael Kors, Versace and Jimmy Choo brands, soared 55.7% after Tapestry, the company behind luxury handbag and accessories retailer Coach, said it was buying the company for roughly $8.5 billion. The deal would put it in better position to take on big European rivals such as LVMH. Tapestry fell 15.9%.

In the bond market, the yield on 10-year Treasury debt rose to 4.09% from 4.01% late Wednesday.

The two-year Treasury yield, which moves more on expectations for the Fed, ticked up to 4.81% from 4.80% late Wednesday.

In energy markets, benchmark U.S. crude lost 14 cents to $82.68 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.58 on Thursday to $82.82. Brent crude, the price basis for international oil trading, lost 14 cents to $86.26 per barrel in London. It declined $1.15 the previous session to $86.40.

The dollar declined to 144.58 yen from Thursday’s 144.72 yen. The euro held steady at $1.0990.

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Stock market today: Wall Street opens lower after pickup in wholesale inflation