Stocks waver in August start after best month since 2020
Newslooks- NEW YORK (AP)
Stocks wavered in afternoon trading on Wall Street Monday as investors face another busy week of corporate earnings reports and economic updates.
The S&P 500 fell 0.3% as of 1:26 p.m. Eastern. The Dow Jones Industrial Average fell 76 points, or 0.2%, to 32,765 and the Nasdaq fell 0.4%.
U.S. crude oil prices fell 4.6% and weighed heavily on energy companies. Exxon Mobil lost 3.6%.
Retailers and consumer products makers made solid gains and offset losses elsewhere in the market. Target rose 1.7% and Procter & Gamble rose 3.5%.
Boeing jumped 6.1% after it cleared a key hurdle with federal regulators and could soon resume deliveries of its large 787 airliner.
The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.61% from 2.65% late Friday.
August’s subdued opening follows a solid rally for stocks in July that marked the best month for the S&P 500 index since November 2020. Stocks had been falling for much of the year as investors worry about high inflation and rising interest rates. A key concern remains whether central banks will raise interest rates too aggressively and push economies into a recession.
The Federal Reserve raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The goal is to slow the U.S. economy to help temper the impact from inflation. An inflation gauge that is closely tracked by the Fed jumped 6.8% in June from a year ago, the biggest increase in four decades.
A surge in oil prices throughout the year only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and that has raised gasoline prices in the U.S. to record levels.
A report last week showed that the U.S. economy contracted last quarter and could be in a recession. Stocks’ recent rally came as worrisome economic reports gave some investors confidence that the Fed can dial back its aggressive pace of rate hikes sooner than expected.
Several big companies are reporting earnings this week, which will give investors insight into how inflation is impacting businesses and consumers. Construction equipment maker Caterpillar and coffee chain Starbucks report earnings on Tuesday. Pharmacy chain CVS reports earnings on Wednesday.
More than half of the companies in the S&P 500 have reported their latest earnings results, which have been mostly better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Businesses have been increasing prices in an effort to keep up profits.
Wall Street will also get several updates on the job market, which has remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely-watched monthly employment report for July on Friday.
