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Wall Street hangs near its best level in 20 months

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  • ASSOCIATED PRESS
                                A street sign is seen in front of the New York Stock Exchange in New York, in June 2022. Wall Street is hanging near its 20-month high today after a mixed set of reports kept questions alive about whether the U.S. economy can pull off a perfect landing that kills high inflation and avoids a recession.

    ASSOCIATED PRESS

    A street sign is seen in front of the New York Stock Exchange in New York, in June 2022. Wall Street is hanging near its 20-month high today after a mixed set of reports kept questions alive about whether the U.S. economy can pull off a perfect landing that kills high inflation and avoids a recession.

NEW YORK >> Wall Street is hanging near its 20-month high today after a mixed set of reports kept questions alive about whether the U.S. economy can pull off a perfect landing that kills high inflation and avoids a recession.

The S&P 500 was 0.1% lower in afternoon trading and potentially heading for its first back-to-back loss since October. The Dow Jones Industrial Average was down 74 points, or 0.2%, as of 1:19 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Stocks were down more sharply in Asia amid worries about the health of China’s economy, the world’s second largest. On Wall Street, KeyCorp slumped 3.2% after it cut its forecast for income from fees and other non-interest income.

U.S. stocks and Treasury yields wavered after reports showed that employers advertised far fewer job openings at the end of October than expected, while growth for services businesses accelerated more last month than expected.

Hope has been rising on Wall Street recently that the U.S. economy is slowing from its recently hot pace by just the right amount. Too much strength in the economy would give inflation more fuel, but too little would mean a recession.

With inflation down from its peak two summers ago, Wall Street is hopeful the Federal Reserve may finally be done with its market-shaking hikes to interest rates and could soon turn to cutting rates. That could help the economy avoid a recession and give a boost to all kinds of investment prices.

Investors have been looking for a slowdown in the job market in particular. The hope is that it can cool more through employers cutting back on open positions than on employers laying off lots of workers. today’s report showed that employers advertised just 8.7 million jobs on the last day of October, down by 617,000 from a month earlier.

It’s the lowest level since 2021, and the “data support our view that rates are at a peak and the Fed’s next move will be a rate cut” in the spring of 2024, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A separate report said that activity for U.S. services industries expanded for the 41st time in the last 42 months, with growth reported by everything from agriculture to wholesale trade. Strength there has been offsetting weakness in manufacturing.

In the bond market, Treasury yields continued to sag further from the heights they reached during late October.

The yield on the 10-year Treasury fell to 4.19% from 4.26% late Monday, offering some more breathing space for stocks and other markets. It had been above 5% and at its highest level in more than a decade during October.

The yield on the two-year Treasury, which more closely tracks expectations for the Fed, went on a jagged run following the economic reports. It fell from 4.61% just before the reports’ release to 4.57% and back to 4.61%.

Traders widely expect the Federal Reserve to hold its key interest rate steady at its next meeting a week from Wednesday, before potentially cutting rates in March, according to data from CME Group.

Fed officials have recently hinted that the federal funds rate may indeed be at its peak, above 5.25% from nearly zero early last year. But Fed Chair Jerome Powell and others have also warned Wall Street about being overzealous in predicting how early a cut could happen.

Lower yields have been one reason prices for cryptocurrencies have been rising recently. Excitement about a possible exchange-traded fund tied to bitcoin, which would open it to new kinds of investors, has also helped send it above $42,000 recently.

The surge of interest helped Robinhood Markets report a roughly 75% jump in trading volumes for crypto during November from a month earlier. It also said customers added about $1.4 billion in net deposits during the month, and its own stock rose 5.5%.

On the losing end was Take-Two Interactive, which slipped 1.5% after a trailer for its highly anticipated Grand Theft Auto VI video game said it’s coming in 2025. That was later than some analysts expected.

In markets abroad, stocks sank 1.9% in Hong Kong and 1.7% in Shanghai after the Moody’s credit-rating agency said it may downgrade China’s rating. Its economic growth is slowing and facing mounting troubles from its real-estate industry.

Stocks also fell in Japan and South Korea but were mixed across Europe.

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