| |
Financial Markets 07/01 15:21
NEW YORK (AP) -- A mixed day of trading left the U.S. stock market split, as
Wall Street's momentum slowed after setting record highs in each of the last
two days. The S&P 500 slipped 0.1% Tuesday for its first loss in four days. The
Dow Jones Industrial Average rose roughly 400 points, and the Nasdaq composite
fell 0.8%. Tesla tugged on the market as the relationship between its CEO, Elon
Musk, and President Donald Trump soured further. But most U.S. stocks rose. So
did short-term Treasury yields following a better-than-expected report on U.S.
job openings. Data on U.S. manufacturing was more mixed.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.
NEW YORK (AP) -- U.S. stocks are drifting in mixed trading on Tuesday as
Wall Street's momentum slows after setting record highs in each of the last two
days.
The S&P 500 rose 0.1% in afternoon trading. The Dow Jones Industrial Average
was up by 452 points, or 1%, as of 2:02 p.m. Eastern time, and the Nasdaq
composite was 0.5% lower.
Tesla tugged on the market as the relationship between its CEO, Elon Musk,
and President Donald Trump soured even further. Once allies, the two have
clashed recently, and Trump suggested there's potentially "BIG MONEY TO BE
SAVED" by scrutinizing subsidies, contracts or other government spending going
to Musk's companies.
Tesla fell 5.6% and was one of the heaviest weights on the S&P 500. It had
already dropped a little more than 21% for the year so far coming into the day,
in part because of Musk's and Trump's feud.
Drops for several darlings of the artificial-intelligence frenzy also
weighed on the market. Nvidia's decline of 2.1% was the heaviest weight on the
S&P 500.
More stocks were rising within the index than falling, led by several casino
companies. They rallied following a report showing better-than-expected growth
in overall gaming revenue in Macao, China's casino hub. Wynn Resorts climbed
8.8%, and Las Vegas Sands gained 8.9%.
Automakers outside of Tesla were also strong, with General Motors up 4.7%
and Ford Motor up 3.9%.
The overall U.S. stock market has made a stunning recovery from its
springtime sell-off of roughly 20%. But challenges still lay ahead for Wall
Street, with one of the largest being the continued threat of Trump's tariffs.
Many of Trump's stiff proposed taxes on imports are currently on pause, but
they're scheduled to kick into effect in about a week. Depending on how big
they are, they could hurt the economy and worsen inflation.
Congress is also debating proposed cuts to tax rates and other measures that
could send the U.S. government's debt spiraling higher, which could push
inflation upward. That in turn could mean higher interest rates, which would
hurt prices for bonds, stocks and other investments.
Despite such challenges, strategists at Barclays say they're seeing signals
of euphoria emerging among some investors. The strategists say a measure that
tries to show how much "excess optimism" is in the market is not far from the
peaks seen during the "meme stock" craze that sent GameStop to market-bending
heights or to the dot-com bubble at the turn of the millennium.
Other signals are also indicating exuberance in the market, such as demand
for what are known as "blank-check companies" that hunt for privately held
companies to buy. When too much optimism is in the market, it can inflate stock
prices to too-high levels in what's called a "bubble."
Of course, "market bubbles are infamously difficult to predict and can
endure far longer than anticipated before correcting," according to the
Barclays strategists led by Stefano Pascale and Anshul Gupta.
In the bond market, Treasury yields rose following some mixed reports on the
U.S. economy.
One said U.S. employers were advertising more job openings at the end of May
than the month before and than economists expected. That could be an
encouraging signal for a job market that had been appearing to settle into a
low-hire, low-fire state.
Separate reports on U.S. manufacturing were more mixed. One from the
Institute for Supply Management said U.S. manufacturing activity shrank again
in June, but not by as much as the month before.
"Customers do not want to make commitments in the wake of massive tariff
uncertainty," one survey respondent in the fabricated metal products industry
said.
A separate report from S&P Global suggested manufacturing production
returned to growth in June after three months of declines.
The yield on the 10-year Treasury rose to 4.25% from 4.24% late Monday after
erasing an earlier, modest loss from the morning.
The two-year Treasury yield, which more closely tracks expectations for what
the Federal Reserve will do with its main interest rate, rose more sharply to
3.78% from 3.72%. Better-than-expected data on the economy could give the Fed
more reason to stay on pause with interest rates, after it halted its cuts to
rates at the start of this year.
Fed Chair Jerome Powell said again on Tuesday that he wants to wait for more
evidence about how much Trump's tariffs will affect the economy and inflation
before resuming cuts to interest rates. That's despite Trump's angry
insistences lately that Powell and the Fed act more quickly to give the economy
a boost through lower rates.
In stock markets abroad, indexes were mixed in Europe and Asia.
Japan's Nikkei 225 fell 1.2%, and South Korea's Kospi rose 0.6% for two of
the larger moves.
___
AP Writers Teresa Cerojano and Matt Ott contributed.
---------
itemid:9fb4c1b60c6502a4fd2ecb6b1640e2c2
|
|
