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US Stocks Drift Ahead of Reports 12/15 09:34
Wall Street is drifting in mixed trading on Monday at the start of a week
full of economic reports that could drive where interest rates, and thus stock
prices, go.
NEW YORK (AP) -- Wall Street is drifting in mixed trading on Monday at the
start of a week full of economic reports that could drive where interest rates,
and thus stock prices, go.
The S&P 500 was virtually unchanged in morning trading, coming off its first
losing week in the last three. The Dow Jones Industrial Average was up 5
points, or less than 0.1%, as of 10 a.m. Eastern time, and the Nasdaq composite
was 0.2% lower.
Helping to keep the overall market in check were stocks in the
artificial-intelligence industry, which were mixed following their scary swings
last week.
Nvidia, the chip company that's become the face of the AI boom, rose 1.1%.
It was one of the strongest forces pushing upward on the S&P 500 Monday after
dropping 4.1% last week.
But Oracle sank another 4.3% following its 12.7% tumble last week, which was
its worst in more than seven years. Broadcom fell 2.7%.
AI stocks have been shaky on worries that all the billions of dollars
flowing into chips and data centers may not produce a big-enough payoff of
profits and productivity to make it worth it. The doubts are causing cracks for
the industry, whose earlier surges was the main driver for the U.S. market's
rally to records.
Besides AI, the main focus on Wall Street this week will be what several big
updates on the U.S. economy's health say.
On Tuesday will come the jobs report for November, and economists expect it
to show employers added 40,000 more jobs than they cut during the month.
Thursday will bring an update on the inflation that U.S. consumers are feeling,
and economists expect it to show inflation was at 3.1% last month, still higher
than households and policymakers would like.
Such data is under the microscope because the Federal Reserve is trying to
figure out if a slowing job market or high inflation is the bigger problem for
the economy. The Fed is in a potentially tough spot because fixing one of those
problems by moving interest rates would likely worsen the other in the short
term.
The hope on Wall Street is that the job market weakens, but only by a
little: enough to get the Fed to lower interest rates but not so much that a
recession swamps the economy. Wall Street loves lower rates because they can
give the economy and prices for investments a boost, even if they also may
worsen inflation.
"With the Fed still appearing to be more focused on labor-market weakness
than inflation, we're likely facing a ?bad news is good' scenario for the jobs
report," according to Chris Larkin, managing director, trading and investing,
at E-Trade from Morgan Stanley.
"As long as the numbers don't suggest employment is falling off a cliff,"
that would mean the market would likely welcome soft numbers, he said.
The spotlight will be brightest on the unemployment rate, not the overall
job growth numbers, because the latter is feeling downward pressure from a
drop-off in immigrant workers. Economists expect Tuesday's report to show the
unemployment rate at 4.4%, which would keep it near its highest and worst level
since 2021.
Treasury yields eased in the bond market ahead of the updates. A report
earlier on Monday morning also said that a measure of manufacturing strength in
New York state unexpectedly weakened, when economists expected to see continued
growth.
The yield on the 10-year Treasury fell to 4.15% from 4.19% late Friday.
Elsewhere on Wall Street, shares of iRobot tumbled 66.8% after the maker of
Roomba vacuums said holders of its stock will likely face a total loss after it
filed for Chapter 11 bankruptcy protection over the weekend. The company has
reached an agreement with its primary contract manufacturer, Picea, to buy it
through a court-supervised process.
In stock markets abroad, indexes rose in Europe following weaker finishes in
Asia.
Indexes fell 1.3% in Hong Kong and 0.6% in Shanghai after the Chinese
government reported a drop in investment in factory equipment, infrastructure
and other fixed assets. It's the latest signal that demand in the world's
second-largest economy remains weak.
Japan's Nikkei 225 sank 1.3% after a quarterly survey of big manufacturers
by the central bank showed a slight improvement in sentiment. That could
encourage the Bank of Japan to go ahead with a hike to interest rates.
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