Friday July 19th, 2024 10:23PM

Stock market today: Wall Street hangs near its records after weak reports on the economy

By The Associated Press

NEW YORK (AP) — U.S. stocks are hanging around their records Wednesday after some weak reports on the economy kept the door open for possible cuts to interest rates later this year.

The S&P 500 was 0.2% higher, a day after setting an all-time high for the 32nd time this year. The Dow Jones Industrial Average was up 28 points, or 0.1%, as of 10:10 a.m. Eastern time, and the Nasdaq composite was adding 0.1% to its record set the day before.

Trading will end early on Wall Street at 1 p.m. Eastern time ahead of the Fourth of July holiday.

Tesla again was helping to boost the market and rose 4.2% a day after reporting a milder drop in sales for the spring than analysts feared. It was the strongest force pushing upward on the S&P 500.

The action was stronger in the bond market, where Treasury yields slid following a flurry of reports that came in weaker than expected on both the job market and U.S. services companies. The data could keep the Federal Reserve on course to deliver the cuts to interest rates later this year that Wall Street desires.

One report said activity for businesses in the real estate, retail trade and other U.S. services industries contracted in June for just the third time in 49 months. The reading was much weaker than economists' forecasts, which called for just a slowing of growth. Perhaps more importantly for Wall Street, the report also said prices are increasing at a slower pace.

That followed reports from earlier in the morning suggesting a slowing job market. One said slightly more U.S. workers applied for unemployment benefits last week than economists expected, though the number remains low compared with history. Another from ADP said employers outside the government slowed their hiring last month, when economists were forecasting an acceleration.

The hope on Wall Street is that the economy will soften by just the right amount: enough to keep a lid upward pressures on inflation, but not so much that it throws workers out of their jobs and triggers a recession. A much more anticipated report will arrive on Friday, when the U.S. government will give its comprehensive update about how many workers employers hired during June.

The yield on the 10-year Treasury dropped to 4.34% from 4.44% late Tuesday, a notable move in the bond market, with much of the slide coming after the report on U.S. services businesses. It’s been generally sinking since April on hopes that inflation is slowing enough to get the Federal Reserve to lower its main interest rate from the highest level in more than two decades.

Yields have hit some bumps recently, though, as traders see rising odds of a Republican sweep in November raising the possibility of cuts to taxes and other policies that could further increase the U.S. government’s debt.

The two-year Treasury yield, which more closely tracks expectations for Fed actions, sank to 4.67% from 4.75% late Tuesday. Traders are now betting on a better than 70% chance that the Federal Reserve will cut its main interest rate as soon as September, according to data from CME Group.

On Wall Street, Constellation Brands swung between gains and losses after the company behind Modelo beer and Robert Mondavi wines reported stronger profit for the latest quarter than financial analysts expected. It cited strength in its beer business, but its revenue for the latest quarter came up just shy of analysts’ forecasts. Its stock was most recently flat.

In stock markets abroad, indexes rose across much of Europe and Asia. France’s CAC 40 climbed 1.2% to recover some more of its losses on worries that a swing away from centrist government policies could lead to much higher French debt.

The FTSE 100 rose 0.6% in London ahead of an upcoming election in the United Kingdom, while Tokyo’s Nikkei 225 jumped 1.3%.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.

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