| |
Financial Markets 08/13 15:35
NEW YORK (AP) -- The U.S. stock market rose to an all-time high Thursday
following the latest sign that inflation is getting less bad. Stocks also got a
lift from easing oil prices in their latest yo-yo move.
The S&P 500 climbed 0.7% and topped its prior record set last week. The Dow
Jones Industrial Average added 69 points, or 0.1%, and the Nasdaq composite
gained 0.8%.
Wall Street relaxed after a report showed prices at the U.S. wholesale level
were 4.7% higher last month than a year earlier. While that's more painful than
anyone would like, it's not as bad as June's 5.5% inflation rate at the
wholesale level, and it was slightly better than economists expected.
If inflation continues to trend that way, the Federal Reserve could decide
to hold off on hikes to interest rates. Higher rates would help keep a lid on
inflation, but they do so by intentionally slowing the economy and making it
more expensive for everyone to borrow money.
Fed officials are split on whether they should have already begun hiking
interest rates. But Thursday's report, following a similar update on inflation
at the U.S. consumer level the day before, has traders now betting on just a
35% chance that the Fed will raise the federal funds rate at its next meeting
in September. That's down from the roughly 50% probability seen two days ago,
according to data from CME Group.
Any increase by the Fed would be the first in more than three years. It also
could anger President Donald Trump, who has been lobbying for lower interest
rates.
Treasury yields sank in the bond market, which eases pressure on stocks and
other investments. The yield on the 10-year Treasury fell to 4.65% from 4.68%
late Wednesday and from 4.72% on Monday, though it's still well above its 3.97%
level from before the war with Iran sent oil and gasoline prices surging.
Oil prices eased back on Thursday, helping to limit worries about inflation.
The price for a barrel of Brent crude oil fell 2.1% to $87.07.
It's been swinging sharply recently and pinballed between $72 and $102 last
month as hopes rose and fell that a deal in the war could allow oil tankers to
freely exit the Middle East again and deliver crude worldwide.
On Wall Street, stocks in the real-estate industry climbed to some of the
market's bigger gains. When interest rates are lower and bonds are paying less
in yield, the dividends that many real-estate investment trusts pay look more
attractive.
Lower mortgage rates could also drive more activity in the housing market,
and the average long-term U.S. mortgage rate fell this week for the first time
in six weeks.
AvalonBay Communities, which owns apartments across the country, rose 2.3%.
Homebuilder D.R. Horton added 2.8%.
Fossil Group climbed 5.9% after the seller of watches and jewelry became one
of the latest companies to report better results for the latest quarter than
analysts expected. Such reports have helped drive Wall Street to records
because stocks tend to track the path of corporate profits over the long term.
They helped offset a drop for Cisco Systems, which fell 8.4% even though the
tech giant reported stronger profit and revenue for the latest quarter than
Wall Street expected.
Analysts said investors may be worried about its profit margins going
forward, and its stock has been shaky through the summer amid worries that
AI-related stocks in general shot too high.
All told, the S&P 500 rose 50.49 points to 7,798.99. The Dow Jones
Industrial Average added 69.72 to 53,839.99, and the Nasdaq composite climbed
214.54 to 26,803.03.
In stock markets abroad, indexes dipped in Europe following a mixed finish
in Asia.
South Korea's Kospi again had one of the world's biggest moves and jumped
3.6%. Seoul has been at the center of the world's swings for
artificial-intelligence stocks because its market is dominated by two tech
giants, Samsung Electronics and SK Hynix.
___
AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this
report.
---------
itemid:3a23f22469cd0e0062f711096906525c
|
|
