Please ensure Javascript is enabled for purposes of website accessibility
Wall Street Tacks on Some More Gains Following Its Best Week of the Year
gvw_ap_news
By Associated Press
Published 5 hours ago on
August 19, 2024

Wall Street extends gains as markets stabilize, with focus shifting to Fed Chair Powell's upcoming speech in Jackson Hole. (AP File)

Share

Getting your Trinity Audio player ready...

NEW YORK — U.S. stocks are ticking higher Monday as Wall Street’s roller coaster of a summer levels out a bit.

The S&P 500 was 0.5% higher in afternoon trading, coming off its best week of the year. The Dow Jones Industrial Average was up 230 points, or 0.6%, as of 1 p.m. Eastern time, and the Nasdaq composite was 0.5% higher.

Chip Company AMD Makes Big Move

Among the biggest movers in the mostly quiet market was chip company Advanced Micro Devices. It rose 2.5% after saying it would buy ZT Systems, a supplier in the cloud computing and artificial-intelligence industries, in a cash-and-stock deal valued at $4.9 billion.

That helped offset a 3.1% drop for Guess? Inc., which said its chief financial officer is stepping down to pursue another opportunity. The apparel and accessories company said it’s begun a search for its next CFO and appointed an interim.

All Eyes on Fed Chair Powell’s Speech

Trading was quiet elsewhere, including in the bond market. Treasury yields were easing a bit ahead of what’s likely to be financial markets’ main event for the week: a speech on Friday by Federal Reserve Chair Jerome Powell.

The setting for the speech in Jackson Hole, Wyoming, has been home to some big policy announcements by the Fed in the past. Expectations aren’t that high this time around, with nearly everyone already expecting the Fed will begin cutting interest rates next month.

That would be the first such cut since the Fed began hiking rates drastically in early 2022, hoping to slow the economy by enough to stifle inflation but not so much that it causes a recession. With inflation slowing from its peak above 9% two summers ago, Fed officials have already hinted cuts to rates are coming. The biggest question is whether the economy just needs the Federal Reserve to remove the brakes or if it needs more acceleration and deeper cuts.

Economic Reports and Corporate Earnings in Focus

A surprisingly weak report on hiring by U.S. employers last month raised worries the Fed has already kept interest rates too high for too long. Such worries combined with concerns that investors took the prices of Nvidia and other highly influential Big Tech stocks too high in their frenzy around artificial-intelligence technology, along with other factors, to send markets globally through a scary couple weeks. That included the worst day for Japan’s market since the Black Monday crash of 1987.

But an ensuing assurance from the Bank of Japan on interest rates there has helped calm the market. Several recent reports on the U.S. economy have also come in stronger than expected, covering everything from inflation to sales at U.S. retailers, which bolstered optimism.

This upcoming week doesn’t have as many economic reports on the schedule. A preliminary report on U.S. business activity day could be the highlight of the week, arriving on Thursday.

More action will likely come from corporate earnings reports as the reporting season for the spring winds down. Most companies have turned in better profits for the latest quarter than analysts expected, as is usually the case.

With more than 90% of companies in the S&P 500 having already turned in their reports, they’re on track to deliver growth of nearly 11% in earnings per share from a year earlier, according to FactSet. That would be the best growth since the end of 2021

Retailers dominate the tail end of earnings season, and Lowe’s, Ross Stores, Target and TJX will be among those in the spotlight this week.

A report on Friday suggested U.S consumers are feeling better about the economy than expected, but worries have been high about how much they can continue spending. Those at the lower end of the income spectrum appear to be under particular pressure, with prices still high across the economy despite inflation’s slowdown.

In their commentaries accompanying their earnings reports, CEOs broadly seem to be remaining “in a wait and see loop” amid lingering worries, but there also seems to be confidence in “a pickup when greater macroeconomic and political clarity emerge,” according to Deutsche Bank strategists led by Parag Thatte.

In the bond market, the yield on the 10-year Treasury dipped to 3.85% from 3.88% late Friday.

In stock markets abroad, Japan’s Nikkei 225 dropped 1.8%. It was hurt by a rise in the Japanese yen’s value against the U.S. dollar. Such moves can erode profits for Japanese exporters, and big swings in the yen’s value following a recent hike to interest rates by the Bank of Japan was a big factor in markets’ turmoil earlier this month.

It forced hedge funds around the world to abandon a popular trade en masse, where they had borrowed Japanese yen at cheap rates to invest elsewhere.

On Monday, though, movements in other stock markets outside Tokyo were calmer, with European indexes modestly higher and Asian indexes mixed.

RELATED TOPICS:

DON'T MISS

US Intelligence Officials Say Iran Is to Blame for Hack of Trump’s Presidential Campaign

DON'T MISS

Cal State, University of California Ban Encampments, Impose Protest Rules

DON'T MISS

17,000 AT&T Workers in Southeast Strike Over Contract Negotiations

DON'T MISS

Kamalanomics Revealed: A Solid Center-Left Agenda

DON'T MISS

Harley-Davidson Rethinks DEI Policy After Backlash, Shifts Production to Thailand

DON'T MISS

Protesters Gather in Chicago on Democratic Convention’s Opening Day

DON'T MISS

Trouble Paying Your PG&E Bill? Workshops in Fresno Can Help

DON'T MISS

Merced County Local Races Take Shape for November Ballot. Who’s Running?

DON'T MISS

Former US Rep George Santos Pleads Guilty to Wire Fraud and Identity Theft in His Federal Case

DON'T MISS

Can You Help Fresno Police Crack Two Weekend Homicides?

UP NEXT

Cal State, University of California Ban Encampments, Impose Protest Rules

UP NEXT

17,000 AT&T Workers in Southeast Strike Over Contract Negotiations

UP NEXT

Kamalanomics Revealed: A Solid Center-Left Agenda

UP NEXT

Harley-Davidson Rethinks DEI Policy After Backlash, Shifts Production to Thailand

UP NEXT

Protesters Gather in Chicago on Democratic Convention’s Opening Day

UP NEXT

Trouble Paying Your PG&E Bill? Workshops in Fresno Can Help

UP NEXT

Merced County Local Races Take Shape for November Ballot. Who’s Running?

UP NEXT

Former US Rep George Santos Pleads Guilty to Wire Fraud and Identity Theft in His Federal Case

UP NEXT

Can You Help Fresno Police Crack Two Weekend Homicides?

UP NEXT

Harvey Weinstein Will Remain Locked Up in New York While Awaiting Rape Retrial

Kamalanomics Revealed: A Solid Center-Left Agenda

58 mins ago

Harley-Davidson Rethinks DEI Policy After Backlash, Shifts Production to Thailand

1 hour ago

Protesters Gather in Chicago on Democratic Convention’s Opening Day

1 hour ago

Trouble Paying Your PG&E Bill? Workshops in Fresno Can Help

1 hour ago

Merced County Local Races Take Shape for November Ballot. Who’s Running?

1 hour ago

Former US Rep George Santos Pleads Guilty to Wire Fraud and Identity Theft in His Federal Case

2 hours ago

Can You Help Fresno Police Crack Two Weekend Homicides?

2 hours ago

Harvey Weinstein Will Remain Locked Up in New York While Awaiting Rape Retrial

3 hours ago

Did Taylor Swift Endorse Trump? No, but He Claims She Did Anyway

3 hours ago

DC Councilmember Known for Pushing Antisemitic Conspiracy Theories Is Arrested on Bribery Charge

3 hours ago

US Intelligence Officials Say Iran Is to Blame for Hack of Trump’s Presidential Campaign

WASHINGTON — U.S. intelligence officials said Monday that Iran is responsible for the hack of Donald Trump’s presidential campaign. It...

10 mins ago

10 mins ago

US Intelligence Officials Say Iran Is to Blame for Hack of Trump’s Presidential Campaign

16 mins ago

Cal State, University of California Ban Encampments, Impose Protest Rules

40 mins ago

17,000 AT&T Workers in Southeast Strike Over Contract Negotiations

58 mins ago

Kamalanomics Revealed: A Solid Center-Left Agenda

1 hour ago

Harley-Davidson Rethinks DEI Policy After Backlash, Shifts Production to Thailand

1 hour ago

Protesters Gather in Chicago on Democratic Convention’s Opening Day

1 hour ago

Trouble Paying Your PG&E Bill? Workshops in Fresno Can Help

1 hour ago

Merced County Local Races Take Shape for November Ballot. Who’s Running?

MENU

CONNECT WITH US

Search

Send this to a friend