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Banks help lead stocks lower in early going on Wall Street

NEW YORK (AP) — Banks and technology companies are leading stocks lower in morning trading on Wall Street early Wednesday, but major indexes are still holding on to gains for the week. The S&P 500 slipped 0.
FILE - In this Nov. 5, 2020 file photo, a sign for Wall Street is carved in the side of a building in New York. Stocks are falling on Wall Street Tuesday, June 7, 2022, as rising interest rates and inflation raise concerns about economic growth. (AP Photo/Mark Lennihan, File)

NEW YORK (AP) — Banks and technology companies are leading stocks lower in morning trading on Wall Street early Wednesday, but major indexes are still holding on to gains for the week. The S&P 500 slipped 0.5% in the early going and the Dow Jones Industrial Average gave back 0.6%. Wells Fargo fell 1.5% in the early going and Bank of America was down 1.3%, while chipmaker Intel fell 4.4%. European indexes were also lower and Asian markets closed mostly higher overnight. Crude oil prices were higher. The yield on the 10-year Treasury note, which helps set interest rates on mortgages, rose to 3.01%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — Major U.S. markets slipped before the opening bell Wednesday as broad concerns about interest rates, inflation and the war in Ukraine continue to weigh on investors.

Futures for the Dow Jones industrials ticked down 0.4% and gave up 0.3% on the S&P 500. Most Asian markets finished in positive territory, mimicking U.S. gains Tuesday, while shares in Europe were in decline at midday.

“Equities are drifting lower as the broader narrative remains unchanged, with peak inflation optimism meeting increasingly hawkish pivots from central banks,” Stephen Innes of SPI Asset Management said in a commentary.

Britain’s FTSE 100 and Germany's DAX both slipped 0.6%, while the CAC 40 in Paris shed 0.7%.

U.S. stocks gained for the second straight day Tuesday, even as the World Bank sharply cut its forecast for economic growth this year, highlighting Russia’s war against Ukraine and the possibility of food shortages and the potential return of “stagflation,” a toxic mix of high inflation and sluggish growth unseen for more than four decades.

Treasury Secretary Janet Yellen, testifying before the the Senate Finance Committee on Tuesday, said she expects inflation to remain elevated and bringing that down is a top priority.

More data on recent price swings arrives Friday when the U.S. reports its consumer price index.

The economy’s fragility has been atop Wall Street’s mind this year amid worries about interest-rate hikes coming from the Federal Reserve. The central bank is moving aggressively to stamp out the worst inflation in decades, but it risks choking off the economy if it moves too far or too quickly.

The Fed is widely expected to raise its key short-term interest rate by half a percentage point at its meeting next week. That would be the second straight increase of double the usual amount, and investors expect a third in July.

Treasury yields have largely climbed through this year with expectations for a more aggressive Fed. They moderated a bit on Tuesday, though.

The yield on the 10-year Treasury held just above 3% at 3.01% early Wednesday. The two-year yield, which more closely tracks expectations for Fed action, inched up to 2.75% from 2.73%.

The next big update on inflation arrives Friday, when the U.S. government releases its latest reading on the consumer price index.

In Asian trading, Hong Kong shares surged 2.2% to 22,014.59 on heavy buying of shares in Chinese technology companies after Beijing approved a new batch of video games. That was seen as a sign the business outlook for tech companies is improving after a prolonged regulatory crackdown.

Tokyo's Nikkei 225 gained 1% to 28,234.29 after Japan reported its economy contracted at a lower pace than earlier reported in the January-March quarter, shrinking 0.5% instead of 1%. The latest data showed consumer spending was not as weak as earlier thought.

In India, the Sensex lost 0.4% to 54,905.16 after the Reserve Bank of India raised its key interest rate by 0.5 basis points to 4.9%.

The Kospi in South Korea was little changed at 2,626.15. In Sydney, the S&P/ASX 200 advanced 0.4% to 7,121.10. The Shanghai Composite index reversed early losses, gaining 0.7% to 3,263.79.

In other trading, benchmark U.S. crude oil added $1.12 to $120.53 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the standard for international trading, picked up $1.04 to $121.61 per barrel.

The U.S. dollar traded at 134.03 Japanese yen, up from 132.61 yen. The euro ticked up to $1.0736 from $1.0705.


Associated Press, The Associated Press