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Thursday December 9th, 2021 12:07AM

Weakness in bank stocks leaves indexes mixed on Wall Street

By The Associated Press
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Major indexes were little changed in afternoon trading as a drop in bond yields pushed down banks and energy companies. Big technology companies, which benefit from lower bond yields, were slightly higher.

The S&P 500 was down less than 0.1% as of 12:08 p.m. Eastern. The Nasdaq Composite was down 0.3% while the Dow Jones Industrial Average, fell 36 points, or 0.1% to 32,695..

The price of U.S. crude oil dropped 4.7% to $58.69 a barrel, pulling energy companies lower. Energy prices have been steadily climbing this year until recently, as the global economy recovers and oil demand worldwide increases while production remains constrained. Marathon Oil fell 2.9%.

Another drop in long-term bond yields was pulling bank stocks slightly lower. Lower yields mean lower interest rates on loans such as mortgages, and weaker profits for banks. The KBW Bank Index of the 24 largest banks was down 1.5%.

The yield of the 10-year Treasury note fell to 1.65%. The yield was well above 1.70% last week, which had put some pressure on the stock market.

Investors continue to be focused on the future outlook for the U.S. economy as millions of Americans get vaccinated every day. Investors are wavering between optimism that coronavirus vaccines that might allow business and travel to return to normal and fears of higher inflation after struggling economies were flooded with credit and government spending.

“The market feels like it is in this inflection point,” said Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management. “It's a good day for reflection.”

The S&P 500 hit a pandemic-era low exactly one year ago, on March 23, 2020, having dropped nearly 34% in about a month. That wiped out three years’ worth of gains. The index wound up roaring back in the coming months, and recovered all its losses by August. Through Monday, it had surged 76% from that low point.

Cronk said many of the signs in the market point to an early-stage recovery. Interest rates are rising as the economy strengthens, commodities like oil are making steady gains and sectors tied closely to economic growth are doing well. “It's playing out exactly as it should play out.”

Federal Reserve Chairman Jerome Powell said Thursday that while the economy was improving, a recovery is “far from complete.” In testimony to Congress, he said the Fed “will continue to provide the economy the support it needs for as long as it takes.”

Investors have been reassured by Powell’s comment earlier that the Fed’s key interest rate will be kept near zero through 2023 even as inflation is forecast to pick up.

AstraZeneca fell 2.7% after U.S. authorities said that the drug company's COVID-19 vaccination trial data contained “incomplete” information, which may impact its efficacy. AstraZeneca's vaccine is being primarily used in Europe.

One company to watch later will be GameStop, which will report its quarterly results after the closing bell. GameStop has been a stock of great interest to a community of online investors, who pushed the stock to astronomical heights earlier in the year. The stock continues to be extremely volatile, often moving more than 10% on a given day. It was down 3.7% in afternoon trading.

___

AP Business Writer Stan Choe contributed.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Health Care, AP Business - Utilities
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