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Financial Markets 10/09 15:25
NEW YORK (AP) -- The U.S. stock market finished its record-setting week with
gains on Friday, even as other financial markets remained indecisive.
The S&P 500 climbed 0.6% for its first gain since setting its all-time high
three days earlier. The Dow Jones Industrial Average added 423 points, or 0.8%,
and the Nasdaq composite rose 0.6%.
The strength came as oil prices continued to yo-yo because of uncertainty about
when the war with Iran will allow the global energy industry to return to
normal. The price for a barrel of Brent crude bounced between $102.50 and $105
before settling at $104.72, up 0.4%.
Treasury yields flipped up and down in the bond market following their own
sharp moves earlier in the week. The yield on the 10-year Treasury eventually
climbed to 5.24% from 5.22% late Thursday.
It recently touched its highest level since 2002 because of worries about high
inflation, the U.S. government's massive debt load, signals that the U.S.
economy is continuing to grow and other factors. High yields threaten to slow
the economy by making borrowing money more expensive for everyone, and the
average 30-year fixed-rate mortgage has already leaped to its highest level in
nearly three years.
Yields are also shooting higher in other bond markets around the world, which
makes investors less willing to pay high prices for stocks and other
investments. But the high yields have attracted investors to recent auctions of
Treasurys, and that demand is helping to limit further increases for yields.
On Wall Street, Humana rallied 11.6% and helped lift the U.S. stock market
despite the swings in the oil and bond markets. The insurer said it received
encouraging data about its quality ratings versus its competitors for Medicare
Advantage plans.
Companies that own cell towers were also at the front of the market, including
leaps of 15.6% for Crown Castle and 9.3% for American Tower.
They rallied after SpaceX announced a purchase that could help it become a
major mobile carrier in the United States. It still needs to get approval from
U.S. regulators, but SpaceX said the purchase of low-band spectrum would allow
its Starlink Mobile business to have a signal that can penetrate walls and
connect customers inside buildings who may not be able to access its
satellites. SpaceX's stock added 1.2%.
The threat of another big competitor sent stocks lower across the wireless
industry, including drops of 13.3% for T-Mobile US, 9.8% for AT&T and 8.7% for
Verizon.
Delta Air Lines erased an early loss and eked out a tiny gain of less than 0.1%
after reporting profit and revenue for the summer that was slightly weaker than
analysts expected. CEO Ed Bastian said demand remains strong and customers want
to fly, but the airline is also having to absorb a $6 billion increase in fuel
costs this year.
The pressure is on companies broadly to deliver strong growth in profits after
their stock prices ran toward records despite the downward push from high bond
yields. Next week will bring high-profile profit reports from the country's
biggest banks, including Citigroup, JPMorgan Chase and Wells Fargo all on
Tuesday.
Expectations are high for corporate profits, even as Americans say they're
feeling more squeezed by high inflation. A preliminary report from the
University of Michigan said Friday that U.S. consumers are raising their own
forecasts for how bad inflation will be over the coming year.
They're expecting inflation of 4.7%, up from their forecast of 4.6% a month ago
and just 3.4% in February before the war with Iran began. Sentiment among
consumers is falling sharply for Americans with lower incomes and smaller
investments in stocks, who can least afford the fast increases in the cost of
living.
All told, the S&P 500 rose 46.18 points to 7,811.54. The Dow Jones Industrial
Average climbed 423.31 to 51,654.95, and the Nasdaq composite gained 172.83 to
27,366.17.
In stock markets abroad, indexes rallied in Europe with gains of at least 1% in
France, Germany and the United Kingdom.
Asian markets were more mixed. Japan's Nikkei 225 finished nearly unchanged,
while Hong Kong's Hang Seng jumped 1.8%.
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AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this
report.
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