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US stock indexes hold steady after back-to-back down weeks

  • ASSOCIATED PRESS A sign for Wall Street on the side of building near the New York Stock Exchange in 2013. Global stock markets traded in narrow ranges today as investors awaited a key meeting of central bankers later this week and continued to monitor developments on the Korean peninsula.

NEW YORK >> U.S. stock indexes held steady today, stabilizing after the Standard & Poor’s 500 index’s back-to-back losses over the last two weeks.

The S&P 500 is close to its lowest level in six weeks following an uncharacteristically bumpy two weeks, which shook up what had been an incredibly smooth ride higher for stocks this year. This week may be a calmer one with few market-moving events approaching on the calendar.

The highlight will likely arrive as the weekend approaches, when central bankers from around the world gather in Wyoming.

KEEPING SCORE

The S&P 500 flipped between modest gains and losses through the day. It was down by a fraction of a point at 2,425, as of 2:15 p.m. Eastern time.

The Dow Jones industrial average dipped 2 points, or less than 0.1 percent, to 21,672. The Nasdaq composite fell 15 points, or 0.2 percent, to 6,202.

CALM CALENDAR

The beginning of this week may be slow for markets. Earnings reporting season is almost over, and roughly 95 percent of companies in the S&P 500 have already said how much they earned during the spring quarter. Few major economic reports are on deck, meanwhile.

A calm week may be welcome, following a second straight, shaky week where the S&P 500 had its biggest one-day loss in three months. Worries about politics, both domestic and international, contributed to the nervousness. The S&P 500 has had two days in the last two weeks where it’s dropped by more than 1 percent. It’s had only four for the year so far, which is well below typical levels.

THANKS FOR THE PROFITS

“One of the reasons the market has held in and performed recently well — although it’s wobbled a bit in the last two weeks — has been earnings,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust. “Without the earnings that we saw, it would have been a much more difficult period of time for the market.”

Companies not only made bigger profits last quarter than analysts expected, they also logged more in sales. That’s particularly encouraging given the struggles many companies have had to grow in recent years amid the still-sluggish global economy.

The strong earnings growth has helped to support the market even as discord in Washington puts President Donald Trump’s pro-business agenda at risk and tensions around the world raise uncertainty. Cecilia expects the market to continue to “trade in some sort of sideways fashion” for the next few weeks.

ROCKY MOUNTAIN HIGH

This week’s highlight will likely be a mountain gathering in Jackson Hole, Wyoming, for central bankers, economists and policy makers. Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi are both expected to speak at the symposium, which begins Aug. 24 and is hosted by the Fed’s regional bank in Kansas City.

Tremendous stimulus from central banks has been one of the main reasons for the stock market’s surge since the Great Recession. But the Federal Reserve is now slowly raising interest rates and preparing to pare back the vast trove of bonds that it bought following the 2008 financial crisis. Investors are wondering when the European Central Bank may follow suit.

Jackson Hole has been the site of market-moving news in the past, including in 2010 when former Fed Chair Ben Bernanke signaled the central bank may embark on another round of bond buying to shore up the economy.

KOREA DRILLS

One wild card for markets may lie in Asia, where U.S. and South Korean forces today started their annual joint military exercises. Tensions are higher than usual with North Korea, and Pyongyang in the past has responded to the drills with weapons tests and a string of belligerent rhetoric.

MARKETS ABROAD

In Asia, South Korea’s Kospi index dipped 0.1 percent, Japan’s Nikkei 225 index fell 0.4 percent and the Hang Seng in Hong Kong rose 0.4 percent.

In Europe, France’s CAC 40 fell 0.5 percent, Germany’s DAX lost 0.8 percent and the FTSE 100 in London slipped 0.1 percent.

BENCHED AGAIN

Stocks of athletic-gear companies sank a second straight day, and the 7 percent drop for Foot Locker was one of the largest losses among companies in the S&P 500.

Shares tumbled across the industry on Aug. 18 after both Foot Locker and Hibbett Sports said revenue fell last quarter. Under Armour’s Class A shares lost 3.7 percent today, and Nike fell 2.5 percent.

POWERED UP

Sempra Energy rose 1.1 percent after saying it will buy Texas power-transmission company Oncor for $9.45 billion in cash. The deal snatches Oncor away from Warren Buffett’s Berkshire Hathaway, which last month said that it would buy the company for $9 billion.

YIELDS

Treasury yields fell. The yield on the 10-year Treasury note dipped to 2.17 percent from 2.20 percent Aug. 18. The two-year yield slipped to 1.29 percent from 1.31 percent, and the 30-year yield fell to 2.76 percent from 2.78 percent.

CURRENCIES

The dollar dipped to 108.72 Japanese yen from 109.26 yen late Friday. The euro rose to $1.1820 from $1.1760, and the British pound rose to $1.2904 from $1.2876.

COMMODITIES

Benchmark U.S. crude fell 88 cents to $47.78 per barrel. Brent crude, the international standard, lost $1.12 to $51.60.

Natural gas rose 7 cents $2.97 per 1,000 cubic feet, heating oil fell 4 cents to $1.59 per gallon and wholesale gasoline lost 4 cents to $1.58 per gallon.

Gold rose $5.10 to settle at $1,296.70 per ounce, silver rose 2 cents to $17.02 per ounce and copper gained 4 cents to $2.98 per pound.

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