Stocks open lower, heading for worst quarter since start of 2020

NEW YORK (AP) — Stocks open broadly lower on Wall Street on Thursday, continuing a dismal streak that sparked a bear market earlier this month and puts the S&P 500 on track for its worst quarter since the early days. from the pandemic to the b

NEW YORK (AP) — Stocks open broadly lower on Wall Street on Thursday, continuing a dismal streak that sparked a bear market earlier this month and puts the S&P 500 on track for its worst quarter since the early days of trading. the pandemic at the start of 2020. The benchmark fell 1.7%, taking its losses for the year to 21%. Retailers and other businesses that rely directly on consumer spending posted some of the biggest losses, as they have all year. Only the energy sector is higher since the beginning of the year, and this is largely due to a surge in oil prices.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK (AP) — U.S. futures fell Thursday ahead of new consumer spending data that could provide clues about how Americans might cut spending in the face of stubbornly high inflation.

Dow Jones Industrials futures fell 1.3% and benchmark S&P 500 index futures fell 1.6%.

On Wednesday, the government confirmed that the US economy shrank 1.6% in the first quarter in its third and latest estimate of the country’s gross domestic product. However, a measure of consumer spending – which accounts for around two-thirds of economic output – was significantly weaker than previous calculations. Estimated growth in consumer spending has been revised down to 1.8% from the 3.1% calculated in May.

The Commerce Department releases its May consumer spending report before markets open Thursday, which will give investors more details about how much Americans spent last month.

Investors are worried about signs that the world’s largest economy could be in recession due to interest rate hikes imposed to quell runaway inflation.

“Demand for equities could remain subdued for at least the next four to six months as interest rate hikes ripple through the U.S. economy,” Stephen Innes of SPI Asset Management said in a report.

By noon, the FTSE 100 in London fell 2%, and the DAX in Frankfurt and the CAC 40 in Paris each lost 2.9%.

In Asia, the Shanghai Composite Index rose 1.1% to 3,398.62 after an official monthly gauge of factory activity rose and new orders improved. The Hang Seng in Hong Kong fell 0.5% to 21,899.57 after spending much of the day in positive territory.

The Nikkei 225 in Tokyo fell 1.5% to 26,393.04 after industrial production in May fell 7.2% from the previous month. This is the largest drop since the start of the coronavirus pandemic in early 2020 and reflects disruptions in China due to virus checks.

The Kospi in Seoul fell 1.6% to 2,339.70 after official data showed industrial production rose 0.1% in May, possibly also depressed by disruptions caused by anti-corruption measures. disease that temporarily shut down Shanghai and other Chinese industrial centers.

Sydney’s S&P-ASX 200 fell 2% to 6,568.10 while India’s Sensex gained 0.3% to 53,208.84. New Zealand, Singapore and Bangkok advanced while Jakarta slipped.

Federal Reserve Chairman Jerome Powell, speaking at a meeting of the European Central Bank in Portugal, said on Wednesday there was “no guarantee” that inflation could be brought under control without hurting the economy. labor market.

Investors are also awaiting weekly jobless claims in the United States, which have been consistently weak, although there have been more layoffs in sectors that have cooled off lately, such as real estate, technology and cryptocurrency.

The global economy was also shaken by Russia’s invasion of Ukraine, which drove up the prices of oil, wheat and other commodities.

A monthly Purchasing Managers’ Index released Thursday by China’s statistics agency and an industry group rose from 49.6 to 50.2 in June on a 100-point scale with numbers above 50 indicating an increase of the activity.

On Wednesday, the S&P 500 slid 0.1%, sending the US benchmark down 7.6% for the month and 20% from its January 3 peak.

The Dow Jones rose 0.3% while the Nasdaq composite slipped less than 0.1%.

In energy markets on Thursday, benchmark U.S. crude fell 96 cents to $108.82 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell from $1.98 on Wednesday to $109.78. Brent crude, the price basis for international oil trade, fell 71 cents to $111.74 a barrel in London. It lost $1.72 the previous session to $116.26. per barrel.

The dollar fell to 136.39 yen from 136.54 yen on Wednesday. The euro fell to $1.0389 from $1.0523.

Joe McDonald, The Associated Press

Lynn A. Saleh