US stocks edge further from their record as oil prices rise
NEW YORK (AP) — Oil prices jumped Thursday, and the price for a barrel of Brent crude got back above $104, while the U.S. stock market pulled further from its record.
The S&P 500 dipped 0.5% and is on track for a second modest loss after setting its all-time high. The Dow Jones Industrial Average was down 131 points, or 0.3%, as of 12:48 p.m. Eastern time, and the Nasdaq composite was 0.9% lower.
Stocks bent under a 3.8% rise for the price of a barrel of Brent, the international standard, to $104.08. It’s been swinging between $96 and nearly $110 over the last month on uncertainty about when the war with Iran will allow the global energy industry to return to normal.
Wall Street also felt pressure from more sharp swings within the bond market.
The yield on the 10-year Treasury veered from 5.28% late Wednesday to 5.35% early Thursday morning. It then fell back to 5.26%.
Despite all the back and forth, it remains near its highest level since 2002 and well above its 3.97% level from before the war with Iran began because of worries about high inflation, big government debt loads and other factors.
Also helping to support yields was the latest report to suggest the U.S. economy is continuing to chug along. Fewer U.S. workers applied for unemployment benefits last week, which may mean companies are laying off fewer workers.
Higher yields can slow the economy by making it more expensive for everyone to borrow money. High yields also put downward pressure on prices for stocks and other investments, and those seen as the most expensive often feel the brunt.
That raises the pressure on companies to deliver big growth in profits, which can offset the downward push on their stock prices from higher bond yields. A big reason for the S&P 500's rally to a record is that analysts expect companies in the index to deliver nearly 30% growth in earnings per share this upcoming reporting season.
That’s a high bar.
Levi Strauss on late Wednesday reported a bigger profit for its latest quarter than analysts expected, while raising its forecast for profit over its full fiscal year. But its stock nevertheless fell 3.1% after its growth in revenue fell short of analysts’ expectations.
PepsiCo, in contrast, added 1.3% after reporting stronger profit and revenue for the latest quarter than analysts expected and highlighting strength outside of North America. It, though, cut its forecast for an underlying measure of profit this fiscal year.
Expectations are likely not as high for PepsiCo as for other companies because its stock came into the day with a drop of nearly 14% for the year so far. That compares with gains of nearly 15% for the S&P 500 and 27.3% for Nvidia over the same time, which are both near their records.
Nvidia, the chip company that’s ridden the tidal wave of demand created by the artificial-intelligence technology frenzy, fell 1.1% and was one of Thursday's heaviest weights on the S&P 500.
That was even though a bellwether for the chip industry, Taiwan Semiconductor Manufacturing Co., reported growth for September that suggested its revenue for the latest quarter was strong enough to top analysts’ expectations. TSMC's stock that trades in the United States fell 2%.
In stock markets abroad, South Korea’s Kospi fell 2.6% for one of the world’s larger losses. It was hurt by a 2.4% drop for Samsung Electronics, one of its two dominant stocks.
The tech giant said its operating profit for the latest quarter likely soared to $107.4 trillion Korean won (roughly $80 billion) from $12.17 trillion won a year earlier, but that wasn’t enough to satisfy investors.
Indexes fell across much of the rest of Asia and Europe.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
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