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Sunday July 3rd, 2022 7:58PM

US stocks open higher following 7 straight weeks of losses

By The Associated Press

NEW YORK (AP) — Major indexes are opening broadly higher on Wall Street Monday following seven weeks of declines that nearly ended the bull market that began in March 2020. The S&P 500 is up 0.9% in the early going. The tech-heavy Nasdaq is up 0.6% and the Dow Jones Industrial Average climbed 1%. European markets were also higher and Asian markets closed mixed overnight. Treasury yields are slightly higher. The yield on the 10-year Treasury note, which helps set mortgage rates, rose to 2.81%. VMWare soared following a report that chipmaker Broadcom is in talks to buy it.

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

NEW YORK (AP) — Wall Street pointed toward gains before markets opened Monday after dipping close to the edge of a bear market to close the week Friday.

Futures for the Dow Jones Industrials rose 1% and the S&P 500 climbed 1.1% in premarket trading.

Benchmarks rose in Frankfurt, London and Tokyo and fell in Paris and Hong Kong. Oil prices also gained.

Yet it has been a brutal stretch for major markets in the U.S. and globally.

On Friday the S&P 500 dipped more than 20% below its peak set early this year before buying late in the day gave it a tiny gain. It finished 18.7% below its record. That capped a seventh straight losing week, the longest since 2001, when the dot-com bubble was deflating.

Inflation and rising interest rates, the war in Ukraine, and China’s slowing economy are all punishing stocks and raising fears about a possible U.S. recession.

Investors are looking ahead to the release of minutes from the latest policy setting meeting of the Federal Reserve and updates on consumer prices, due later this week.

Britain’s FTSE 100 rose 1.1% in midday trading, while Germany's DAX gained 0.8% and the CAC 40 in Paris picked up 0.3%.

In Asian trading, the Nikkei 225 in Tokyo gained 1% to 27,001.52.

Visiting Japan, President Joe Biden launched a fresh U.S. initiative on economic cooperation and trade. Called the Indo-Pacific Economic Framework, the White House said it will help the United States and Asian economies work more closely on issues including supply chains, digital trade, clean energy, worker protections and anticorruption efforts.

Details remained to be negotiated, making it unclear how the framework might help U.S. workers and businesses while also serving the interests of partner countries.

South Korea's Kospi climbed 0.3% to 2,647.38.

Australia's S&P/ASX 200 edged 0.1% higher to 7,148.90 after Australia’s center-left opposition party on Saturday toppled the conservative government that had held power for almost a decade.

Anthony Albanese was sworn in as prime minister after his Labor party clinched its first electoral win since 2007. Labor has promised more financial assistance and a robust social safety net as Australia grapples with the highest inflation since 2001 and soaring housing prices.

But analysts said the policy stance of the newly elected administration was not significantly different from the incumbent government and major changes were not expected.

“Although it is possible that Labor will represent a slightly more fiscally supportive government than their predecessors, we don’t see many implications for financial markets from this election result," ING Economics economists said in a commentary.

Hong Kong's Hang Seng index lost 1.2% to 20,470.06 while the Shanghai Composite index was nearly unchanged at 3,146.86.

Hong Kong-traded shares in food delivery company Meituan lost 3.1% while e-commerce giant Alibaba Group Holding gave up 3.4%.

Many tech stocks, seen as some of the most vulnerable to rising interest rates, have already fallen much more than 20% this year. That includes a 37.2% tumble for Tesla and a 69.1% nosedive for Netflix.

It’s a sharp turnaround from the powerful run Wall Street enjoyed after emerging from its last bear market in early 2020, at the start of the pandemic.

With inflation at its highest level in four decades, the Fed has switched from keeping interest rates super-low to support markets and the economy and is raising rates and making other moves to tamp down inflation. The worry is it might go too far or too quickly.

Goldman Sachs economists recently put the probability of a U.S. recession in the next two years at 35%.

Inflation has been painfully high for months. But the market's worries swung higher after Russia's invasion of Ukraine sent prices spiraling further at grocery stores and gasoline pumps, because the region is a major source of energy and grains.

In other trading, U.S. benchmark crude oil added $1.12 to $111.40 per barrel in electronic trading on the New York Mercantile Exchange. It gained 39 cents to $110.28 on Friday.

Brent crude, used as the basis for pricing for international trading, advanced $1.28 to $113.83 per barrel.

The U.S. dollar slipped to 127.50 Japanese yen from 127.87 yen late Friday. The euro rose to $1.0678 from $1.0564.

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