NEW YORK (AP) — U.S. stocks were volatile Thursday as momentum cooled following the previous day’s record surge.
The S&P 500 rose 0.1% in early trading. As of 9:35 a.m. ET, the Dow Jones Industrial Average was up 36 points, or 0.1%, while the Nasdaq Composite was nearly flat. All three companies hit record highs on Wednesday.
Walmart Inc. rose 6.4% after announcing its latest quarterly profit beat analysts’ expectations. The company also said that this year’s sales could exceed its initial forecast range. That could be an encouraging signal for the broader economy, as concerns grow about whether U.S. households can sustain still-high inflation and high credit card payments.
Target, which will report quarterly results next week, also rose, along with other retailers such as Dollar General.
Chubb rose 5.5% 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 U.S. stock indexes hit record highs throughout May, following a difficult April. There is also renewed hope that the U.S. Federal Reserve could cut key interest rates at least once or twice this year.
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.
U.S. Treasury yields fell in May as hopes grew that the economy could hit the expected sweet spot — enough to limit high inflation but not enough to cause a deep recession. Economic data was mixed on Thursday, but yields remained relatively stable.
A report found that while the number of workers who applied for unemployment benefits last week was slightly higher than economists expected, the number is still low compared to the past. Homebuilders also broke ground on fewer projects last month than expected, manufacturing growth in the Mid-Atlantic region was weaker than expected and import prices rose more than expected, some officials said.
“Today’s numbers were consistent with the overall theme of the week, nothing dramatic, but the economy is improving. “The weather is showing signs of steadily cooling down,” he said.
The 10-year government bond yield was flat at 4.35%. The yield on the two-year Treasury note, which is more closely tied to expectations for Fed action, rose to 4.77% from 4.72% late Wednesday.
Among the losers on Wall Street, Deere Inc. fell 2.2% despite reporting better-than-expected profits for its latest quarter. The company’s full-year profit forecast was lower than analysts expected because farmers are buying fewer tractors and other equipment.
GameStop and AMC Entertainment also fell for the second day in a row, further retreating from a surprising start to the week. They are acting more on investor excitement than on changes in financial outlook.
GameStop is down 18%, but is still up 85% for the week so far. AMC Entertainment fell 9.8%.
In overseas stock markets, indexes were mostly up in Asia, followed by modest declines in most of Europe. Hong Kong’s Hang Seng rose 1.6% as trading resumed after the holiday, while Japan’s Nikkei stock average rose 1.4%.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
