NEW YORK (AP) — U.S. stocks were hovering near record highs Tuesday after the latest signs that the economic recovery is faltering. Growth may be slowing As expected, no craters occurred.
The S&P 500 was up 0.1% after hitting its 30th all-time high this year. The Dow Jones Industrial Average was up 8 points, or less than 0.1%, as of 12:43 p.m. Eastern time, and the Nasdaq Composite was down 0.1%.
Stocks rose slightly as yields in the bond market fell. Treasury yields fell after the U.S. Securities and Exchange Commission reported that sales at U.S. retailers rose last month but still fell short of economists’ expectations.
That could be an encouraging signal to the Federal Reserve, which is trying to pull off a tough rebalancing of the economy. The Fed wants to keep interest rates high enough to slow the economy down enough to keep inflation in check, and is hoping to cut its key interest rate, which is at a 20-year high, just before it slides into a painful recession.
The retail sales figures have boosted traders’ expectations that the Federal Reserve will cut interest rates at least once and possibly twice this year, according to CME Group data, and Fed officials themselves are broadly on track to cut rates once or twice in 2024.
The yield on the 10-year Treasury note fell to 4.22% from Monday’s close of 4.29%. The yield on the two-year note, which more accurately reflects the Fed’s expectations, fell even further, to 4.70% from 4.77%.
A Bank of America survey of global fund managers found they are the most optimistic about stocks they have been since the fall of 2021, with relatively few assets tucked away in cash and heavy allocations to equities. Fewer managers are also expecting a “hard landing” in which the economy falls into a deep recession.
Of course, the downside to Tuesday’s weaker-than-expected data could be that it sends warning signals that household spending, the main engine of the U.S. economy, is weakening. The U.S. government revised down its May figures, as well as retail sales figures for past months.
Although inflation has slowed since its peak, it remains high. Low-income households They are especially struggling to cope with rising prices.
Homebuilder Lennar Inc. slid 4.4% after co-CEO Stuart Miller said “weaker consumer sentiment” and fluctuating interest rates were challenging the company. Shares fell even though the company reported profits for its latest quarter that beat analyst expectations.
Shares in Fisker fell 53% to 2 cents after the electric car maker filed for a share sale. Chapter 11 Bankruptcy The company cited “various market and macroeconomic headwinds” as the reason.
Among the winners on Wall Street was Ray Ze Boy, which reported better-than-expected profits and sales for its latest quarter, sending its shares up 19.5%. The furniture maker said it got off to a strong start in the current quarter, helped by a strong Memorial Day sale, even as high interest rates have dampened home sales across the economy.
SilkRoad Medical shares rose 23.9% after Boston Scientific agreed to buy the medical device maker in an all-cash deal that values the deal at about $1.26 billion, including cash. Boston Scientific rose 0.3%.
Abroad, European stock indexes continue to recover after crashing last week, when the surprise victory of a far-right party in an election that raised concerns about a possible rise in the government’s debt burden, particularly in France.
France’s CAC 40 rose 0.8%, its second consecutive annual increase.
In Asia, Japan’s Nikkei stock average rose 1%. Toyota Motor Corporation The company’s shares rose after shareholders rejected a proposal to force Toyoda Akio, the grandson of the company’s founder, to step down from his role as chairman.
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AP Business Writer Elaine Kurtenbach contributed.
