Salem Radio Network News Friday, August 19, 2022

Business

Stocks edge up to hit six week high, dollar weaker after U.S. data

By Chuck Mikolajczak

NEW YORK (Reuters) – A gauge of global stocks edged higher on Friday, poised for a sixth straight day of gains, while the dollar dipped against a basket of major currencies following soft data on U.S. business activity.

On Wall Street, the S&P 500 showed modest losses as names such as Meta and Alphabet lost ground in the wake of earnings from Snap Inc, which plunged 37.31% but defensive sectors such as utilities and consumer staples rose.

Still, the benchmark S&P index was up more than 3% for the week, on pace for its biggest weekly percentage gain in four.

“We’ve had an amazing week and quite frankly it’s quite surprising to see the strength we have had, the resilience, given that we are going to get a three-quarter point hike next week, and of course there is still another one looming out in late September,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“We have had four suckers’ rallies this year already and I hope this is not one of those but I just think caution would be prudent here.”

S&P Global on Friday said its preliminary U.S. Composite PMI Output Index had tumbled far more than expected to 47.5 this month from a final reading of 52.3 in June, the first contraction in almost two years.

Recent data has showed signs of a slowing economy, but the Federal Reserve is still widely expected to raise interest rates by 75 basis points at its policy meeting as it attempts to combat inflation. On Thursday, the European Central Bank (ECB) raised rates by 50 basis points after weeks of indicating a 24 basis point hike was in the offing.

The Dow Jones Industrial Average rose 93.91 points, or 0.29%, to 32,130.81, the S&P 500 lost 0.91 points, or 0.02%, to 3,998.04 and the Nasdaq Composite dropped 72.30 points, or 0.6%, to 11,987.31.

The pan-European STOXX 600 index rose 0.51% and MSCI’s gauge of stocks across the globe gained 0.22% after climbing to 623.79, its highest level since June 10. The STOXX 600 was on pace for its biggest weekly percentage gain in four months.

The dollar lost ground on the heels of the business activity data, as investors attempt to weigh slowing economic activity against the rate of easing inflation.

The dollar index fell 0.281%, with the euro up 0.02% to $1.023.

The euro slipped in choppy trading after data showed euro zone business activity also unexpectedly contracted this month, with companies continuing to report rising costs as inflation bites, hitting consumer demand and weighing on the outlook, a survey showed.

After touching a 20-year high last week, the dollar was on track for its biggest weekly percentage decline in 5-1/2 months.

The Japanese yen strengthened 1.03% versus the greenback at 135.98 per dollar, while Sterling was last trading at $1.2042, up 0.41% on the day.

Benchmark 10-year notes last rose 33/32 in price to yield 2.7886%, from 2.908% late on Thursday.

U.S. crude recently rose 0.51% to $96.84 per barrel and Brent was at $104.67, up 0.78% on the day.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

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