Wall Street points slightly lower as more earnings come in

By YURI KAGEYAMA and MATT OTT
AP Business Writers

Wall Street drifted modestly lower before the bell Friday as investors digest more corporate earnings while waiting for the latest government data on consumer inflation.

Futures for the Dow Jones industrials were down less than 0.1%, while futures for the S&P 500 slipped 0.3%.

The Commerce Department issues its December report on consumer spending later Friday. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation by raising its key lending rate seven times last year.

Last month’s report showed that prices rose 5.5% in November from a year earlier, down from a revised 6.1% increase in October and the smallest gain since October 2021. Fed officials have all but promised to keep rates elevated until inflation retreats closer to their target of around 2%.

On Thursday, Wall Street stocks climbed to their highest level in nearly eight weeks after the Commerce Department reported that the U.S. economy expanded at a 2.9% annual pace in the last quarter, ending 2022 with momentum despite higher interest rates and widespread fears of a looming recession.

But more swings may still be ahead, as investors digest a torrent of earnings and economic reports. Markets have veered up and down recently as worries about a severe recession and drop-off in profits battle against hopes the economy can manage a soft landing and the Federal Reserve may ease up on interest rates.

Intel tumbled more than 10% in off-hours trading after the chipmaker missed profit and revenue forecasts. Shares of Hasbro skidded close to 6% in premarket after the toymaker announced late Thursday that it is cutting about 1,000 jobs — about 15% of its workforce — as part of moves announced last year to save up to $300 million annually by 2025.

In Europe at midday, France’s CAC 40 and Germany’s DAX each declined 0.2%, while Britain’s FTSE 100 was flat.

In Tokyo on Friday, data showed the core consumer price index, excluding volatile food and energy costs, was up 4.3%, slightly higher than expected and above the Bank of Japan’s target of 2%. Japan’s central bank has refrained from raising interest rates to tamp down price increases, however, saying the risk of growth slowing too quickly outweighs the threat from inflation.

Japan’s benchmark Nikkei 225 rose nearly 0.1% to finish at 27,382.56. Australia’s S&P/ASX 200 added 0.3% to 7,493.80. South Korea’s Kospi gained 0.6% to 2,484.18. Hong Kong’s Hang Seng rose 0.5% to 22,688.90.

Markets remained closed in Shanghai for the Lunar New Year holidays. Markets on the Chinese mainland will reopen on Monday.

India’s Sensex fell 1.5% as the Adani Group was hit by heavy selling for a second trading session. Shares in seven Adani companies have plunged this week, wiping out billions of dollars in market value, after short-selling firm Hindenburg Research said it was betting against the conglomerate, which has holdings in energy, data transmission, construction and other major industries.

The Adani Group nonetheless went ahead with a share offering for retail investors Friday, as shares in its flagship Adani Enterprises sank nearly 16%. Shares in some other group companies fell as much as 20%, triggering some halts to trading.

In energy trading, benchmark U.S. crude rose $1.17 to $82.18 a barrel in electronic trading on the New York Mercantile Exchange. It lost 14 cents to $81.01 on Thursday.

Brent crude, the international pricing standard, gained $1.09 to $88.37 a barrel in London.

In currency trading, the U.S. dollar edged down to 129.86 Japanese yen from 130.23 yen. The euro cost $1.0864, down from $1.0890.

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Kageyama reported from Tokyo; Ott reported from Washington.