US stocks open higher as China cuts interest rates
US stocks opened higher on Friday, recovering some points after the S&P 500 neared a bear market and China’s central bank cut a key interest rate.
S&P 500 up 0.9% after broad market index closed down 0.6% and hit its lowest level since March 2021 on Thursday. The Nasdaq Composite rose 1.2% and the Dow Jones Industrial Average rose 191 points, or 0.6%, shortly after the opening bell.
Stocks have been under pressure this week due to concerns about global growth. Investors worry about how aggressively the Federal Reserve will respond to high inflation and the Covid-19 shutdowns in China that have limited economic activity and disrupted supply chains. difficulties, leading to a sell-off situation.
The S&P 500 is on track to close for the seventh straight week. It was close to entering bear market territory in volatile trading on Thursday, a market short for a 20% drop from its last peak.
On Friday, China’s central bank unexpectedly important interest rate cut acts as a benchmark for mortgages, a move that is widely expected to support the country’s housing market. It keeps other rates unchanged.
“We have growth concerns at the moment, coming from China and monetary policy in the US,” said Arun Sai, a multi-level strategist at Pictet Asset Management. “But we still need to build up more evidence to convince markets that a soft landing is possible.”
Government bonds have been up for the most part this week as they typically perform well in times of economic stress. The yield on the benchmark 10-year Treasury note fell on Friday to 2.840% from 2.854% on Thursday, extending its decline into a third day. Price increases when output decreases.
Ross Stores shares fell 22% after the retailer posted decrease in sales and said it expected further reductions this quarter. Foot Locker rose 9.4% after the chief financial officer said he expects the company’s full-year profit to be at the top of guidance.
Palo Alto Networks jumped 11% after reporting quarterly revenue that beat analyst expectations. Member network security company
also increased by 8%.
Agricultural equipment production machine
6.3% off even if it’s posted higher revenue and profit on strong demand. Its chief executive said supply chain problems had disrupted production and delivery levels.
“Earnings season has been good, with a bit more companies than usual expectations. The question is from next quarter on, where will we experience the full impact of the spike in oil prices and the war in Ukraine,” said Kiran Ganesh, multi-level strategist at UBS. “That’s going to be the key, here’s a little preview.”
Overseas, the Stoxx Europe 600 added 1.4%. Asian shares also rose, with the Shanghai Composite up 1.6% and Hong Kong’s Hang Seng up 3%.
Swiss luxury brand Cie. Financière Richemont drops 12% after ignoring analyst estimates for operating profit, citing suspended operations in Russia.
Oil prices inched up with Brent gaining 0.3% to $112.44 a barrel.
Write to Anna Hirtenstein at [email protected]
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