Stocks open higher on Wall Street after a two-day slide
NEW YORK (AP) — Stocks are opening slightly higher on Wall Street following two days of slumps as investors worry that high interest rates aren’t going away any time soon as the Federal Reserve fights inflation. Best Buy was up sharply in the early going Tuesday after reporting results for its latest quarter that were much better than analysts were expecting. That helped lift the stock prices of other retailers. Energy companies fell along with the price of crude oil. The S&P 500 was up 0.2% in the first few minutes of trading, and other major indexes were also higher.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street was poised to rebound Tuesday after two days of widespread losses stemming from last week’s Federal Reserve pledge to fight inflation by keeping interest rates elevated.
Futures for the Dow Jones industrials jumped 0.6% and futures for the benchmark S&P 500 index rose 0.7% after falling 0.7% on Monday. The S&P’s 3.4% drop on Friday was its biggest one-day loss in two months.
Markets have been roiled since Federal Reserve Chairman Jerome Powell indicated Friday the U.S. central bank will stick to a strategy of rate hikes to cool inflation that is at multi-decade highs. That appeared to quiet speculation the Fed might ease off due to signs economic activity is cooling.
Lower stock markets and weakness in consumer spending “are not enough to blow the Fed off its tightening course,” said Chris Turner of ING in a report.
On Monday, the Dow dropped 0.6% and the Nasdaq composite tumbled 1%.
Investors will also be watching a consumer confidence report Tuesday and data from the Labor Department on July job openings.
In midday European trading, Frankfurt’s DAX added 1.8% and the CAC 40 in Paris gained 1.1% while the FTSE 100 in London inched up 0.1%.
In Asia, the Shanghai Composite Index lost 0.4% to 3,227.22 and the Hang Seng in Hong Kong shed 0.4% to 19,949.03.
The Nikkei 225 in Tokyo gained 1.2% to 28,217.36 after the official unemployment rate for July held steady and the labor participation rate, or the share of the working-age population that is in jobs, stayed at a record high.
The Kospi in Seoul added 1% to 2,450.93 and Sydney’s S&P-ASX 200 gained 0.5% to 6,998.30.
India’s Sensex advanced 2% to 59,139.81. New Zealand and Southeast Asian markets also advanced.
Selling on Monday was widespread. Tech and health care stocks were the biggest decliners. Energy and utilities stocks rose.
Investors worry rate hikes by the Fed and by central banks in Europe and Asia might derail global economic growth.
Fed officials point to a strong U.S. job market as evidence the biggest global economy can tolerate higher borrowing costs. Some acknowledge a recession is possible but say that might be necessary to extinguish surging inflation.
The Fed has raised interest rates four times this year. The latest two were by 0.75 percentage points, three times its usual margin.
Some investors had hoped that the Fed would ease up if inflation subsides. That sentiment led to a rally for stocks in July and early August.
Investors expect another large hike at the Fed’s September meeting, though the likelihood of such a big increase is smaller following weaker-than-forecast July retail sales.
The Fed’s preferred gauge of inflation decelerated last month, while other data shows consumer spending slowed. Wall Street will get several more updates on the economy this week.
In energy markets, benchmark U.S. crude lost $2.89 to $94.12 per barrel in electronic trading on the New York Mercantile Exchange. The contract soared $3.95 on Monday to $97.01. Brent crude, the price basis for international trading, shed $2.92 to $101.01 per barrel in London. It jumped $4.10 the previous session to $105.09.
The dollar declined to 138.25 yen from Monday’s 138.83 yen. The euro rose to $1.0030 from 99.92 cents.
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