News
Stock market today: Asian shares follow Wall Street retreat
Stocks fell Thursday in Asia after U.S. stocks fell under the weight of higher yields in the bond market, with the Dow Jones Industrial Average giving up more than 400 points.
Tokyo’s benchmark Nikkei 225 index fell 1.5% to 37,980.55 and Hong Kong’s Hang Seng index fell 0.6% to 18,362.23.
The Shanghai Composite index rose less than 0.1% to 3,113.06.
Australia’s S&P/ASX 200 fell 0.4% to 7,632.10, while the Kospi in Seoul fell 0.9% to 2,652.98.
Taiwan’s Taiex lost 0.8%.
“Hotter and stickier than expected global inflation appears to be taking the wind out of asset markets,” Mizuho Bank said in a commentary. “In other words, “Goldilocks” falling apart. And concerns about the adverse impact on demand caused by higher rates,” he said.
On Wednesday, the S&P 500 fell 0.7% to 5,266.95, paring the gain from May, which was on track to be the best month since November. Four out of five stocks in the index fell.
The Dow Industrial lost 1.1% to 38,441.54 and the Nasdaq Composite fell 0.6% to 16,920.58 after setting its latest all-time high.
American Airlines Group led a slide in airline stocks after cutting its profit forecast and other financial targets for the spring. The carrier said fuel costs may be slightly lower than previously thought, but it would also likely be an important revenue trend. Shares fell 13.5%.
ConocoPhillips fell 3.1% after it said I would buy marathon oil in an all-stock deal that valued the company at $22.5 billion, including $5.4 billion of net debt. It’s the latest big deal for an industry that has seen several acquisition announcements recently. Marathon Oil rose 8.4%.
Advance Auto Parts plunged 11% after its last quarter results and revenue fell slightly short of analysts’ expectations.
Another rise in long-term Treasury yields also weighed on the stock market, and the 10-year yield rose to 4.61% from 4.54% on Tuesday night following an auction of $44 billion in bonds seven-year Treasury.
The 10-year yield was still down for the month, but has been rising since falling below 4.40% in mid-May. Higher Treasury yields hurt prices for all types of investments.
This month’s yield swings also came as traders recalibrated their expectations about when the Federal Reserve might start cutting your prime interest ratewhich is at its highest level in more than two decades.
With inflation stubbornly higher, traders have had to postpone their overly optimistic predictions for rate cuts several times this year.
The Fed is trying to strike the balance of crushing the economy just enough, through high interest rates, to keep inflation fully under control, but not so much that it leads to widespread layoffs.
A Fed report released Wednesday said it has heard from businesses and other contacts across the country that consumers are resisting further price increases. This, in turn, is eating into companies’ profits as their own insurance costs and other expenses continue to rise.
Despite concerns about failing U.S. consumer spending, especially those who have lower incomesBNP Paribas economists expect a healthy job market, a slowdown in inflation and even gains made by some cryptocurrency investors to help support the economy’s main engine.
US stocks have continued to hit records despite concerns about interest rates remaining at high levels, in part because stocks related to artificial intelligence technology continue to rise. The latest news from Nvidia explosive profit report helped fuel the frenzy even further. After briefly falling in morning trading, it rose 0.8% on Thursday, its most modest gain since the earnings report.
On the winning side of Wall Street was Dick’s Sporting Goods, which jumped 15.9% after beating analyst expectations for profit and revenue in the latest quarter. The retailer also raised its full-year profit forecast.
Chewy, an online seller of pet supplies, also reported stronger profit in the latest quarter than expected, and its shares rose 27.1%.
In other trading, US benchmark crude oil rose 11 cents to $79.34 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 8 cents to $83.51 per barrel.
The US dollar fell to 157.42 Japanese yen from 157.65 yen. The euro fell to $1.0800 from $1.0803.
___
AP Business Writer Stan Choe contributed.