NEW YORK (AP) — U.S. stocks are hanging near their records Tuesday after Chinese stocks soared following a slew of moves by the Chinese central bank to prop up the world’s second-largest economy.
The S&P 500 was 0.1% higher in afternoon trading, a day after setting an all-time high for the 40th time this year. The movements were tentative, and the index drifted up and down following a surprisingly weak report released in the morning on confidence among U.S. consumers.
The Dow Jones Industrial Average was down 8 points, or less than 0.1%, and likewise coming off a record. The Nasdaq composite was 0.5% higher, as of 2:25 p.m. Eastern time.
Financial markets have been mostly ebullient after the Federal Reserve made a drastic turn last week in how it sets interest rates. It’s now lowering rates to make things easier for the U.S. economy after keeping them high for years in hopes of extinguishing high inflation.
One of the risks that's still hanging over the market is the struggling Chinese economy and how much its flagging growth may affect the rest of the world. After earlier delivering some modest and piecemeal moves, the chief of China’s central bank on Tuesday announced a broad set of changes to bolster its economy, including a reduction in the amount of reserves banks are required to keep.
Analysts called the coordinated moves encouraging, and they helped stocks soar in China. Indexes jumped 4.2% in Shanghai and 4.1% in Hong Kong. But questions still remain about how much they will boost the economy, which has been struggling since Chinese authorities cracked down on excessive borrowing by property developers.
Prices for crude oil and other commodities that a healthy Chinese economy would devour nevertheless climbed. Copper gained 3.5%.
Another risk hanging over Wall Street is the slowing U.S. job market. Now that inflation has eased substantially from its peak two summers ago, the main worry among investors is that a slowdown in hiring by U.S. companies may worsen.
Moves to interest rates can take a notoriously long time to make their way fully through the economy, and the Federal Reserve had been keeping its main interest rate at a two-decade high for more than a year before last week. It did cut by an unusually large amount in hopes of providing relief to the job market and economy.
A report released Tuesday showed U.S. households are feeling more worried about the job market. Their overall confidence level sank in September, according to the Conference Board, instead of rising like economists expected. That's a big deal because spending by U.S. consumers is the heart of the U.S. economy.
Autozone’s stock dropped 1% after the seller of auto replacement parts and accessories said a key measure of its sales performance among its U.S. stores barely grew during the latest quarter. It was part of an underwhelming report where its profit and revenue both fell short of analysts’ expectations.
AutoZone said it's continuing to see customers at its U.S. stores delay purchases of non-essentials.
Another company that depends on the appetite of U.S. shoppers for non-essentials, Thor Industries, was rising 6.7% following a mixed profit report. The maker of recreational vehicles reported better profit and revenue for the latest quarter than analysts expected, but it also gave a forecast for its upcoming fiscal year that sees the RV market continuing to be challenged.
“The talk of a softer market is beginning to sound like a broken record, but we remained focused on managing through it with increasing efficiency,” CEO Bob Martin said.
One of Wall Street's bigger winners was Smartsheet, which helps companies manage projects and automate workflows. It rose 6.4% after Blackstone and Vista Equity Partners agreed to buy it in an all-cash deal valued at $8.4 billion.
In the bond market, Treasury yields slipped after the weaker-than-expected report on consumer confidence erased earlier gains. The 10-year yield fell to 3.73%, from 3.75% late Monday. The two-year yield, which more closely tracks expectations for the Fed’s upcoming moves, fell to 3.54% from 3.59% late Monday.
Traders upped their forecasts for how deeply the Federal Reserve will cut interest rates at its next meeting in November. They're now betting on 58.2% probability of another deeper-than-usual cut of half a percentage point. That's up from a 53% probability the day before, according to data from CME Group.
In stock markets abroad, indexes rose across much of Europe and Asia. France’s CAC 40 jumped 1.3%, South Korea’s Kospi rose 1.1% and Japan’s Nikkei 225 added 0.6%.
___
AP Business Writers Elaine Kurtenbach and Matt Ott contributed.
