Wall Street Drifts Slightly Lower 09/18 09:26
Stocks are drifting in mixed trading on Wall Street Friday, as another
zig-zag week for markets closes out following their abrupt loss of momentum
NEW YORK (AP) -- Stocks are drifting in mixed trading on Wall Street Friday,
as another zig-zag week for markets closes out following their abrupt loss of
momentum this month.
The S&P 500 was down 0.2% after giving up a small gain in the first few
minutes of trading. It's still on pace for a gain of 0.2% this week after a
two-day slump followed up on a two-day gain.
The Dow Jones Industrial Average was down 118 points, or 0.4%, at 27,783, as
of 9:54 a.m. Eastern time, and the Nasdaq composite was down 0.1%. Both drifted
from small gains to losses shortly after trading began. Smaller stocks were
still higher, with the Russell 2000 index of small caps up 0.3%.
Analysts warned that the day's trading could be even bumpier than usual.
Futures and options on stocks and indexes are set to expire in an event known
as "quadruple witching," which can drive swings in prices.
Stocks have already swirled this week despite the Federal Reserve's saying
it expects to keep short-term interest rates at record lows through 2023. Low
rates typically turbocharge the market by encouraging investors to pay higher
prices for stocks, but some investors may have been looking for the Fed to be
even more aggressive.
Growth in some areas of the economy has also slowed after unemployment
benefits and other aid from the federal government expired, and partisan
disagreements in Congress are holding up a renewal of support. Investors say
it's essential that such aid arrives.
Rising tensions between the world's two largest economies are also
continuing to keep markets on edge. The United States said on Friday that it
will ban downloads of Chinese apps WeChat and TikTok on Sunday.
President Donald Trump's targeting of the Chinese tech industry has caused
intermittent worries in the market about a possible retaliation against the
Big Tech stocks already stumbled sharply this month on worries that their
prices have grown too expensive following their virtuosic performance through
the pandemic. Surging shares of Apple, Microsoft, Amazon and others helped
carry Wall Street back to record heights, even as the pandemic walloped much of
the economy, as the coronavirus accelerated work-from-home and other trends
that benefit them.
But they suddenly lost momentum two weeks ago, causing the market to swing
with them. Because these companies have grown so massive, their stock movements
have huge sway over broad market indexes, such as the S&P 500.
On Friday, several Big Tech stocks were swinging from gains to losses. Apple
was down 0.8%, and Microsoft was down 0.5%, but Facebook was up 0.5%.
Also on the long list of concerns for markets is how the pandemic
progresses, whether a vaccine for COVID-19 could indeed be available in early
2021 as many investors expect and what November's U.S. presidential election
will do to the economy.
Treasury yields remain very low, showing the powerful strength of the
Federal Reserve and continued expectations by bond investors for only modest
economic growth and inflation. The yield on the 10-year Treasury dipped to
0.67% from 0.69% late Thursday.
Other stock markets around the world made mostly modest moves.
In Europe, the German DAX lost 0.1%, and the French CAC 40 sank 0.9%. The
FTSE 100 in London fell 0.5%.
Asian markets rose. Japan's Nikkei 225 added 0.2%, South Korea's Kospi
gained 0.3% and Hong Kong's Hang Seng climbed 0.5%. Stocks in Shanghai rose
Benchmark U.S. crude oil rose 0.2% to $41.04 to per barrel. Brent crude, the
international standard, dropped 0.1% to $43.24 per barrel.