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Home LATEST NEWS Wall Street opens lower, headed for another weekly loss

Wall Street opens lower, headed for another weekly loss

By JOE McDONALD and MATT OTT, AP Business Writers

Stocks are opening lower on Wall Street as traders worry about slowing economic growth around the world amid a global effort to fight inflation. The S&P 500 index fell 1.4% at the start, as did the Nasdaq Composite. The Dow Jones Industrial Average fell slightly less. Treasury yields, which affect rates on mortgages and other types of loans, remain at multi-year highs. European markets also fell. UK government bond yields rose after Britain’s new government announced a sweeping plan for tax cuts in a bid to prop up the UK economy. Oil prices fell sharply.

THIS IS A LAST MINUTE UPDATE. The previous AP story follows below.

Wall Street hurtled into another day of losses early Friday after more rate hikes by the Federal Reserve and other central banks sparked fears of a potential global recession and sent oil prices to their lowest level since the early days. days of 2022.

Dow Jones industrial average futures fell 1.1% and S&P 500 futures fell 1.2%. Barring a sharp turnaround, the major US indices are poised to end the week with losses for the fourth time in five weeks.

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Oil prices fell 3%, threatening to drop below $80 a barrel for the first time since early January.

The central banks of Britain, Switzerland, Turkey and the Philippines raised interest rates after the Fed raised its key rate on Wednesday for the fifth time this year and signaled more hikes were on the way.

“Global equities are struggling as the world anticipates that higher rates will trigger a much sooner and possibly severe global recession,” Oanda’s Edward Moya said in a report.

Britain’s new government on Friday announced a sweeping plan of tax cuts it said would be financed by loans and revenue generated by anticipated growth, sending the pound falling below $1.12 for the first time. time since 1985.

Economists have expressed concern that the government’s policies will lead to a sharp increase in lending, which will undermine confidence in the British economy.

Also on Friday, Vietnam’s central bank raised a key lending rate by a full percentage point, surprising forecasters. The State Bank of Vietnam appeared to be trying to cool inflation while also discouraging an outflow of capital in search of higher interest rates abroad.

Investors fear that central banks are willing to tolerate a painful economic downturn to control prices.

Some point to signs that the US economy is cooling as support for the Fed to backtrack on plans for more rate hikes. But Chairman Jerome Powell said Wednesday that rates will stay high for a long time if it takes to get inflation back to its 2% target.

US consumer inflation eased to 8.3% in August from a peak of 9.1% in the previous month. But core inflation, which excludes volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% from a month earlier, compared with a 0.3% rise in July. That indicated that the pressure for prices to rise was still strong.

The Fed on Wednesday raised its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It released a forecast showing it expects the benchmark rate to be 4.4% by the end of the year, a full point higher than forecast in June.

By midday in Europe, London’s FTSE 100 was down 2.1%, Frankfurt’s DAX lost 2.5% and Paris’s CAC 40 was down 2.2%.

In Asia, the Shanghai Composite Index lost 0.7% to 3,088.36 and Hong Kong’s Hang Seng declined 1.1% to 17,953.50. The Seoul Kospi fell 1.8% to 2,290.00.

Sydney’s S&P-ASX 200 fell 1.9% to 6,574.70 and India’s Sensex fell 1.5% to 58,231.49. New Zealand and Southeast Asian markets declined.

In energy markets, benchmark US crude lost $2.75 to $80.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 55 cents to $83.49 on Thursday. Brent crude, used to set international oil prices, fell $2.63 to $86.90 a barrel in London. It was up 63 cents the previous session at $90.46.

The dollar rose to 142.88 yen from 142.49 yen on Thursday. The euro fell to 97.60 cents from 98.31 cents.

On Thursday, the S&P 500 lost 0.8%, the Dow Jones dropped 0.4% and the Nasdaq Composite slid 1.4%.

McDonald reports from Beijing; Ott reported from Washington.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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