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Sunday May 16th, 2021 10:38AM

Stocks open lower on Wall Street, led by drops in technology

By The Associated Press
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NEW YORK (AP) — Wall Street tapped the brakes on its record-setting run Thursday, pulling the S&P 500 down 0.6% in early trading. Technology stocks led the way lower, and the tech-heavy Nasdaq dropped 1.5%. Apple and Facebook, big drivers of the market’s recent rally, each fell about 3%. The S&P 500 closed at its latest all-time high a day earlier and has risen for nine out of the last ten trading days. The government reported that the number of Americans applying for unemployment benefits fell to 881,000, which is still a very high number. Asian markets finished mixed and European markets were broadly higher.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Most major stock markets and U.S. futures rose Thursday after Wall Street surged to its biggest daily gain since July despite uncertainty about the global outlook.

London, Frankfurt and Tokyo advanced while Shanghai declined.

Investors have been encouraged by central bank infusions of credit into struggling economies and hopes for a vaccine to end the coronavirus pandemic that has plunged the world into its deepest slump since the 1930s. Forecasters warn the stock market recovery might be running too far ahead of economic activity as the United States and some other countries reimpose anti-virus controls that hamper business.

“The irony of market exuberance is rich,” said Mizuho Bank in a report. “Record highs on Wall St. make a mockery of policymakers grasping for recourse to the worst downturn in decades.”

In early trading, the FTSE 100 in London gained 0.7% to 5,981.93 and the DAX in Frankfurt added 1.4% to 13,428.33. The CAC 40 in France added 1.6% to 5,112.38.

On Wall Street, the future for the benchmark S&P 500 index was up less than 0.1% while that for the Dow Jones Industrial Average gained 0.2%.

On Thursday, the S&P 500 rose 1.5%. The index is up 10.8% this year following a five-month streak of gains. The Dow Jones Industrial Average gained 1.6%.

The Nasdaq composite added 1% to 12,056.44. The tech-heavy Nasdaq is up 34.4%, driven by gains for Apple and other technology giants that investors believe are safe bets as the public spends more time on internet-connected devices.

In Asia, the Shanghai Composite Index opened higher but retreated to close down 0.6% at 3,384.98. The Nikke 225 in Tokyo gained 0.9% to 23,465.53. The Hang Seng in Hong Kong lost o.5% to 25,001.30.

The Kospi in Seoul advanced 1.3% to 2,395.90 and Sydney's S&P-ASX 200 was up 0.8% at 6,112.60. India's Sensex was unchanged at 39,092.05. New Zealand and Bangkok gained while Singapore and Jakarta retreated.

U.S. stocks have gained despite lack of agreement in Congress on a new economic aid package with additional unemployment benefits to support consumer spending.

A report by payroll processor ADP, widely watched as a forerunner of government employment data due out Friday, showed the private sector added 428,000 jobs in August, less than half the 1 million expected by forecasters.

Analysts said that could be a warning sign the job market is cooling after some U.S. states reimposed anti-virus controls and the expiration of supplemental unemployment benefits cut into consumer spending.

"Bullish stock market sentiment seems to be nearing a tentative peak as the labor market recovery stalls," said Edward Moya of Oanda in a report.

Also Wednesday, the U.S. Federal Reserve said its August survey of businesses found enduring uncertainty over the pandemic and the harm it causes to consumer and business activity.

Health care and communications stocks also helped to drive Wednesday's rally.

Benchmark U.S. crude oil for October delivery lost 36 cents to $41.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract slid $1.25 on Wednesday. Brent crude, the basis for pricing international oils, declined 48 cents to $43.95 per barrel in London. It dropped $1.15 the previous session to $44.43 a barrel.

The dollar rose to 106.24 yen from 106.16 yen on Wednesday. The euro declined to $1.1816 from $1.1855.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets
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