Financial Markets 09/28 15:35
NEW YORK (AP) -- Wall Street ticked higher Thursday to trim its sharp loss
for September after pressure squeezing it from the oil and bond markets relaxed
The S&P 500 rose 25.19, or 0.6%, to 4,299.70. The Dow Jones Industrial
Average added 116.07 points, or 0.3%, to 33,666.34, and the Nasdaq composite
gained 108.43, or 0.8%, to 13,201.28.
A drop in oil prices took some heat off the stock market, a day after crude
reached its highest price of the year. Treasury yields also relaxed to give the
stock market more of a breather, particularly Big Tech companies.
A 2.1% climb for Meta Platforms and 1.5% gain for Nvidia were two of the
strongest forces lifting the S&P 500.
Stocks, though, are still on track for their worst month of the year as Wall
Street grapples with a new normal where interest rates may stay high for a
while. The Federal Reserve has pulled its main interest rate to the highest
level since 2001 in hopes of extinguishing high inflation, and it indicated
last week it may cut rates by less next year than earlier expected.
It's a sharp departure from prior years for investors, who counted on the
Fed to cut rates quickly and sharply whenever things looked dicey. Lower rates
can goose financial markets, while high rates slow the economy by design and
hurt prices for stocks and other investments.
The threat of higher rates for longer has pushed Treasury yields up sharply
in the bond market. The yield on the 10-year Treasury climbed above 4.67% in
the morning, near its highest level since 2007. It later fell back to 4.57%,
down from 4.61% late Wednesday.
The two-year Treasury yield, which moves more on expectations for Fed
action, slipped to 5.06% from 5.14%.
Yields squiggled following the latest batch of reports on the economy.
One said fewer workers applied for unemployment benefits last week than
economists expected. It's the latest signal of a solid job market, one that has
helped prevent a recession but may also be feeding upward pressure into
A separate report said the U.S. economy grew at a 2.1% annual rate during
the summer, following some revisions to earlier estimates. That was below
economists' expectations, but economic growth looks like it's remained solid
through the third quarter at least. The question is how the trend goes in the
final three months of the year.
Altogether, the reports didn't give anything to change investors' minds
about the Fed staying tough on interest rates, something that Wall Street calls
a "hawkish" stance on policy.
"The waiting game continues," said Mike Loewengart, head of model portfolio
construction at Morgan Stanley Global Investment Office.
"Until there's a clear break from this holding pattern, investors will be
living with a hawkish Fed, higher-for-longer interest rates and, likely,
additional market volatility," he said.
Many other challenges are also looming over the economy and Wall Street
besides the threat of higher interest rates for longer.
Most immediate is the threat of another U.S. government shutdown as soon as
this weekend, though financial markets have held up rather well during past
Another threat eased a bit, as crude oil prices pulled back. A barrel of
benchmark U.S. crude oil sank $1.97 to settle at $91.71. It's still up sharply
from below $70 during the summer, which has added to worries about inflation.
Brent crude, the international standard, also fell by more than $1 per barrel.
On Wall Street, Peloton Interactive jumped 5.4% after the online exercise
bike and fitness company announced a five-year partnership with athletic wear
maker Lululemon Athletica.
Trimble rose 6.5% after it said it will get $2 billion in cash and a 15%
ownership stake in a joint venture with agricultural machinery company AGCO.
Trimble will contribute much of its precision agriculture business to the joint
venture. AGCO rose 2.8%.
On the losing end of Wall Street, Micron Technology slumped 4.4% despite
reporting better results for the latest quarter than analysts expected. Its
forecast for upcoming profitability fell short of some analysts' estimates.
In stock markets abroad, the Hang Seng fell 1.4% in Hong Kong as trading in
shares of property developer China Evergrande Group was suspended. The company
said authorities had informed it that its chairman, Hui Ka Yan, had been
subjected to "mandatory measures in accordance with the law due to suspicion of
Evergrande is the world's most heavily indebted real estate developer and is
at the center of a property market crisis that is dragging on China's economic
AP Business Writers Yuri Kageyama and Matt Ott contributed.