US stocks are falling choppy, pulling indices further from the highs
Tokyo Stock indexes fell on Wall Street on Wednesday, retreating slightly from their record highs. The S&P 500 fell 0.3% after earlier drifting between slight gains and a 0.4% decline. It’s sitting just below its all-time high a week and a half ago. The majority of shares in the S&P 500 fell, and the smaller shares of the Russell 2000 fell even more. But gains in some heavy stocks helped cushion the losses. The bond market has been relatively calm in the wake of turbulent trading recently amid concerns about rising inflation. The yield on the 10-year Treasury fell to 1.59%.
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New York (AFP) – Stock indexes on Wall Street are falling on Wednesday, slightly off their record highs.
The S&P 500 was down 0.2%, as of 2:56 pm ET, after earlier drifting between minor gains and a 0.4% decline. It’s sitting just below its all-time high a week and a half ago.
The Dow Jones Industrial Average fell 188 points, or 0.5%, to 35,954, and the Nasdaq Composite was down 0.2%.
Visa’s 5.7% drop was one of the heaviest weights in the market, accounting for nearly a third of the S&P 500’s drop per se. It sank after Amazon said it would not accept UK-issued Visa credit cards amid a dispute over fees.
The majority of stocks in the S&P 500 also fell, and smaller stocks in the Russell 2000 Index fell further, dropping 1.3%. But gains in some heavy stocks helped cushion the losses. Apple shares are up 2%, and Tesla is up 4.3%. Since they are two of the largest stocks on Wall Street by market capitalization, their moves carry additional weight on the S&P 500.
The US government bond market, which has been the epicenter of some of the most turbulent business on Wall Street lately, has been relatively calm. The yield on the 10-year Treasury fell to 1.60% from 1.63% late Wednesday.
Short-term yields also fell, giving up part of the big gains made last week. Then, higher-than-expected inflation across the economy prompted investors to raise their expectations when the Federal Reserve would raise interest rates from record lows.
Shares have mostly risen over the past month as companies broadly reported much stronger summer earnings than analysts had expected. Several major retailers joined the show on Wednesday, including Lowe’s, Target and TJX, which operates TJ Maxx and Marshalls stores. But the stock market reaction has not been uniform.
TJX rose 6.9% after reporting stronger-than-expected revenue and earnings for the fourth quarter. Home improvement retailer Lowe’s gained 1.5% as it raised its revenue forecast for the year after strong third-quarter financial results.
But Target fell 4.9% although it also posted better-than-expected earnings. The company said it made less than $1 in sales in the quarter, compared to a year earlier, as it was pressured by rising merchandise and supply chain costs, among other things.
Such pressures – and the extent to which they affect the bottom line of firms – are under scrutiny as relatively high inflation continues to sweep the world. Many companies have warned that their profit margins could be hit by supply chain problems and rising costs for everything from workers’ wages to raw materials.
A report on the housing market showed some of these pressures. Builders started creating fewer homes last month than in September, contrary to economists’ expectations for growth. This may be an indication that supply shortages and rising costs are slowing down the industry. But the number of building permits also rose more than expected, which may show that homeowners are finally seeing these pressures abate.
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