NEW YORK (AP) – Stocks are off to another weak start on Wall Street Thursday as more technology companies weighed in on the broader market. Investors got another dire readout on inflation as the government reported that wholesale prices soared 11% in April from a year ago. The report on the producer price index did contain some signs that price increases are moderating. Disney fell 4.8% after missing analysts’ forecasts in its latest earnings report, while plant-based food maker Beyond Meat slumped 13% after reporting a much larger loss than Wall Street. The yield on the 10-year Treasury note fell 2.85%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows.
NEW YORK (AP) – Wall Street pointed to another down day when markets open Thursday following more evidence of a stubborn inflation that has already led to sell-offs in Asia and Europe.
Futures for the S&P 500 were 0.5% lower and the Dow industrials lost 0.3% a day after a US government report showed inflation remained close to a four-decade high.
Inflation slowed to a touch in April, down 8.3% from 8.5% in March, according to the US Department of Labor, but the decline was smaller than hoped for and reinforced expectations that the Federal Reserve will continue to raise interest rates to counter rising. prices.
Economists expect US data being released Thursday will reveal the costs of goods before they reach consumers, called producer prices, to continue to rise. Those costs can be passed on to consumers as companies are forced to cover higher costs.
Also on Thursday, Britain said its economy grew at the slowest pace during the first quarter of a year as retailers and manufacturers struggled with supply disruptions and higher prices. That is raising fears that the country may be headed for a recession.
Gross domestic product, the broadest measure of economic activity, rose 0.8% in the period, slowing from 1.3% in the previous quarter, the Office for National Statistics said Thursday. Retail sales figures show British consumers are already cutting costs. Economists forecast the UK will see the biggest drop in living standards in more than six decades this year.
Britain’s FTSE 100 lost 2% in midday trading, Germany’s DAX fell 1.8%, while the CAC 40 in Paris lost 2.1%.
In Asia, a pledge by Chinese leaders to support the slowing economy has appeared to have little effect.
Hong Kong’s benchmark fell 2.2% to 19,380.34 following several prominent Democratic advocates, including a retired Roman Catholic cardinal.
The arrests of Cardinal Joseph Zen, singer Denise H o and others followed last week’s hardline chief executive for the semi-autonomous Chinese language, where Beijing has been taking control of the former British colony in 1997.
In other Asian trading, Tokyo’s Nikkei 225 gave up 1.8% to 25,748.72.
The Shanghai Composite Index shed 0.1% to 3,054.99. Australia’s S&P / ASX 200 lost 1.8% to 6,941.00. South Korea’s Kospi slipped 1.6% to 2,550.08.
Economists said the US inflation report will keep track of the Fed’s fast and potentially sharp increases in interest rates in the coming months.
To corral high inflation, the Fed has already pulled its key short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it could continue to hike rates by double the usual amount at upcoming meetings.
Such moves are designed to help the economy slow down, but the Fed risks causing a recession if it raises rates too high or too quickly. Higher rates tend to pull up for stocks and all kinds of investments fall into the meantime. Higher-yielding, safer Treasury bonds, for example, become more attractive to investors.
Higher rates make big technology companies, other high-growth stocks and even cryptocurrencies relatively less appealing.
Bitcoin continued its slide, falling to around $ 25,000 at one point Thursday, dragging a slew of other digital currencies down with it. Bitcoin has lost 28% of its value in the past week alone and is off 60% from the highs near $ 70,000 late last year.
In other trading, benchmark US oil dropped $ 1.26 to $ 104.45 per barrel in electronic trading on the New York Mercantile Exchange. It gained 6% on Wednesday.
Brent crude, the international pricing standard, sheds $ 1.41 to $ 106.10 per barrel. It added 4.9% the day before.
The dollar slipped to 128.58 Japanese yen from 129.95 yen. The euro fell to $ 1.0408 from $ 1.0517.
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