A passerby looks at an electronic stock board displaying Japan’s Nikkei 225 index at a securities firm in Tokyo, Friday, May 17, 2024. (AP Photo/Hoshiko Eugene)
Asian stocks were mixed on Friday, with Chinese stocks reversing earlier losses following the announcement of new measures to boost the sluggish property market.
U.S. futures were little changed, at nearly $40,000, after the Dow Jones Industrial Average exceeded that level for the first time on Thursday.
The People’s Bank of China on Friday announced reductions in required down payments for home loans and lower interest rates for first and second home purchases. The announcement came after authorities in Beijing reported continued weakness in the economy, particularly in the real estate industry.
The government was scheduled to hold a press conference on real estate policy later on Friday.
Hong Kong’s Hang Seng Index rose 0.7% to 19,512.54, while the Shanghai Composite Index rose 0.8% to 3,119.49.
The biggest winners were real estate developers.
Shares in China Evergrande Group, the world’s most indebted developer with more than $300 billion in debt, soared nearly 18%, while China Vanke, another real estate conglomerate also in crisis, jumped 9.9%. It skyrocketed.
In Tokyo, the Nikkei Stock Average fell 0.3% to $38,787.38, while Australia’s S&P/Australian Stock Exchange 200 Index fell 0.9% to $7,814.40.
South Korea’s Kospi fell 1% to 2,724.62.
On Thursday, the Dow Jones Industrial Average fell 0.1% to 39,869.38 after breaking above 40,000. The S&P 500 index, which is more widely followed on Wall Street, fell 0.2% to 5,297.10, and the Nasdaq Composite Index fell 0.3% to 16,698.32. All three indexes rose to record highs on Wednesday.
Deere weighed on the market, falling 4.7% despite reporting better-than-expected profits for the most recent quarter. The company lowered its profit forecast for the current fiscal year than analysts expected, as farmers are buying fewer tractors and other machinery.
Homebuilders also contributed to the decline after a weaker-than-expected report on the housing industry. The stock regained some of the huge gains from the previous day, when stocks soared on hopes of lower mortgage rates. DR Horton fell 4.2%, Lennar fell 3.3% and Palto Group fell 2.8%.
GameStop and AMC Entertainment also fell, falling for the second day in a row after a surprising start to the week. GameStop is down 30%, but is still up nearly 59% for the week so far. AMC Entertainment fell 15.3%.
Those declines helped offset a 7% rise in Walmart, which reported stronger latest quarterly profits than analysts expected. The company also said that this year’s sales could exceed the previously indicated range of expectations.
Walmart’s strength could be an encouraging signal for the broader economy. There are growing concerns about whether American households, especially low-income households, can sustain high levels of inflation and high credit card payments.
Chubb rose 4.7% after Warren Buffett’s Berkshire Hathaway announced it had acquired a stake in the insurance company.
The better-than-expected profit report was one of the main reasons why U.S. stock indexes rose broadly to record highs in May after a difficult April. There is also renewed hope that the US Federal Reserve could cut its key interest rates at least once this year. The Fed is keeping the federal funds rate at the highest level in more than 20 years.
A series of worse-than-expected reports on inflation at the beginning of the year had cast doubt on the possibility of such a rate cut, but some more encouraging data has since been released.
A report Thursday showed that slightly more workers applied for unemployment benefits last week than economists expected, but the number remains low compared to the past. Some also believe that manufacturing growth in the Mid-Atlantic region has been weaker than expected, causing import prices to rise more than expected.
In other trading early Friday, benchmark U.S. crude oil rose 33 cents to $79.56 a barrel. Brent crude, the international standard, added 50 cents to $83.77 per barrel.
The dollar rose to 155.65 yen from 155.40 yen. The euro fell to $1.0861 from $1.0868.
