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Financial Markets 10/08 16:14
NEW YORK (AP) -- Some sharp reversals kept financial markets unsteady on
Thursday, as oil prices rose and U.S. stock indexes finished mixed.
The S&P 500 fell 0.5% for a second straight loss after setting its all-time
high. The Dow Jones Industrial Average added 51 points, or 0.1%, and the Nasdaq
composite fell 1.3% as technology stocks took particularly hard hits.
Stocks felt pressure from a 4.1% rise in the price for a barrel of Brent crude
oil, the international standard, to $104.28. It's been pinballing between $96
and nearly $110 over the last month on uncertainty about when the war with Iran
will allow the global energy industry to return to normal.
Brent got to nearly $106 in the morning before President Donald Trump sent its
price veering after saying "productive discussions" are happening with Iran and
that the U.S. military would not attack it before the upcoming U.S. elections
in November. That briefly sent Brent toward $103 before it eventually turned
back upward.
Even sharper swings shook the bond market, where yields have been jumping
worldwide to their highest levels in years or even decades, which threaten to
slow the economy.
The 10-year Treasury yield initially rose with oil prices, going from 5.28%
late Wednesday to 5.35% early Thursday morning. But it then fell all the way
back to 5.23%.
It dropped after the U.S. government said that it sold $22 billion in 30-year
Treasury bonds at an auction with a high yield of less than 5.62%. That helped
bring the 30-year Treasury yield down to 5.60% from 5.73% in the morning, which
is a notable move for the bond market.
A day earlier, an auction of 10-year Treasurys also helped bring down yields.
Strong demand there showed investors are still willing to buy U.S. government
debt, even though their prices have fallen sharply this year because of worries
about high inflation, big government debt loads and other factors.
"Higher U.S. Treasury yields are starting to create their own demand, buyers
are showing up for the right price," said Tony Miano, global investment
strategy analyst at Wells Fargo Investment Institute.
On Wall Street, the ease in Treasury yields helped the majority of U.S. stocks
rise, including two out of every three in the S&P 500 index.
PepsiCo climbed 3.7% after the snack and drink company reported stronger profit
and revenue for the latest quarter than analysts expected, thanks in part to
strength outside of North America.
But drops for several influential technology stocks overshadowed such gains.
Nvidia, the chip company that's ridden the tidal wave of demand created by
artificial-intelligence technology, fell 2.9%. Because it's the largest stock
by value on Wall Street, it was the heaviest weight on the S&P 500 even though
other stocks had larger losses.
That included drops for other AI-related stocks, including Broadcom's 4.3% fall
and Micron Technology's 4.8% slide.
The losses came even though a bellwether for the chip industry, Taiwan
Semiconductor Manufacturing Co., reported growth for September that suggested
its revenue for the latest quarter was strong enough to top analysts'
expectations. TSMC's stock that trades in the United States fell 3%.
AI stocks are under heavy pressure to report big growth to justify how high
their stock prices have soared in recent years because of the AI frenzy.
All told, the S&P 500 fell 36.41 points to 7,765.36. The Dow Jones Industrial
Average added 51.77 to 51,231.64, and the Nasdaq composite slid 345.35 to
27,193.34.
In South Korea's stock market, Samsung Electronics dropped 2.4% to help drag
the Kospi index down 2.6%. The tech giant said its operating profit for the
latest quarter likely soared to 107.4 trillion Korean won (roughly $80 billion)
from 12.17 trillion won a year earlier, but that wasn't enough to satisfy
investors.
In other stock markets abroad, indexes fell across much of the rest of Asia and
Europe.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
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