The moves helped stem a 2.8% decline at Dollar Tree, whose profits were in line with analysts’ expectations but sales slightly missed. The company also said it was considering selling or spinning off its Family Dollar business.
The retail sector as a whole highlights the challenges facing lower-income American families as they try to keep up with still-high inflation.
In the bond market, Treasury yields were relatively stable following mixed data on the economy. A report said business in real estate, health care and other U.S. service sectors turned to growth last month, beating economists’ expectations. Perhaps more importantly for Wall Street, the Institute for Supply Management report also said price growth slowed in May from the previous month.
A separate report in the morning suggested hiring at non-government U.S. employers slowed more than expected last month.
Stocks have been generally volatile recently as reports suggest that U.S. economic growth is slowing under the weight of high interest rates. Wall Street is actually hoping for such a slowdown, because it could tame inflation and force the Federal Reserve to deliver the interest rate cuts that investors crave. But a slowdown could also make it more likely that the economy will go too far and slide into a recession, ultimately hurting stocks.
Treasury yields fell sharply as weaker-than-expected economic reports raised hopes of upcoming interest rate cuts by the Federal Reserve.
The yield on the 10-year Treasury note recouped some of its losses after better-than-expected U.S. services data, rising slightly to 4.34% from 4.33% late Tuesday but still well below the 4.60% recorded a week ago.
The next big move for Treasury yields and Wall Street overall could come on Friday, when the U.S. government releases its monthly jobs report. The report is much more comprehensive than ADP’s report on Wednesday, which focused only on the private sector, and economists expect Friday’s data to show a slight increase in overall employment. There is still hope that job market growth will slow, but not enough to lead to widespread layoffs.
Overseas stock markets saw stock indexes rise across much of Europe as investors expect the European Central Bank to cut interest rates when it meets on Thursday amid concerns about an economic slowdown.
Stocks fell in much of Asia, dropping 0.9 percent in Tokyo and 0.8 percent in Seoul, but rising 1 percent in the latter.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
