US stocks open higher, led by gains in banks and industrials
US stocks open higher, led by gains in banks and industrials

Stocks are opening mostly higher on Wall Street, getting the week off to a positive start after the S&P 500 posted its biggest weekly decline since February.

The benchmark index was up 0.3 per cent in the first few minutes of trading Monday.

Banks and industrial companies were doing the best, while several big technology companies were falling.

That helped pull the tech-heavy Nasdaq composite down 0.4 per cent. Investors will be keeping an eye on more data coming out on inflation this week, as well as earnings from Nike and FedEx. Bond prices fell. The yield on the 10-year Treasury note rose to 1.48 per cent.

Investors are still thinking over the Federal Reserve's signal that it may raise current ultra-low interest rates sooner than expected and slow its market-supporting bond purchases.

Part of the Fed's mission is to keep prices under control. The fear is that burgeoning inflation may prompt central banks to dial back the lavish support that has lifted markets to new highs after they plunged at the onset of the coronavirus pandemic last year.

Until its latest policy meeting, last week, the Fed had indicated it viewed recent price hikes as transient and would let the recovering economy run hot. Now it's forecasting raising interest rates twice in 2023.

Asian markets opened mostly lower early Monday but the losses were contained.

In Europe, Germany's DAX gained 0.3 per cent to 15,493.53 and the CAC 40 in Paris edged 0.1 per cent higher, to 6,573.41.

In London, the FTSE 100 inched up less than 0.1 per cent, to 7,021.31.

The future for the S&P 500 gained 0.4 per cent while that for the Dow industrials climbed 0.5 per cent.

In Asian trading, the Nikkei 225 gave up 953 points to 28,010.93 and the Kospi in Seoul lost 0.8 per cent to 3,240.79. Hong Kong's Hang Seng index lost 1.1 per cent to 28,489.00. Australia's S&P/ASX 200 declined 1.8 per cent to 7,235.30.

The Shanghai Composite index edged 0.1 per cent higher, to 3,529.18.

India's Sensex gained 0.4 per cent and Thailand's benchmark fell 0.8 per cent.

On Friday, the S&P 500 fell 1.3 per cent to 4,166.45 in a broad retreat, while the Dow Jones Industrial Average lost 1.6%, to 33,290.08. The Nasdaq composite fell 0.9 per cent to 14,030.38.

Markets were spooked after St. Louis Federal Reserve President James Bullard told CNBC he expects the first rate increase may come as soon as next year.

The Fed also has begun talks about slowing its USD 120 billion of monthly bond purchases, which are helping to keep mortgages and other longer-term borrowing cheap. But the Fed's chair has said such a tapering is still likely a ways away.

Any pullback in Fed support would be a big change for markets, which have been feasting on ultra-low rates for more than a year.

The major US stock indexes remain relatively close to their record highs as the economy powers its way out of the recession caused by the pandemic. The S&P 500 is only about 2 per cent below its all-time high set on Monday, and the Dow is within 5 per cent of its record set last month.

The 10-year Treasury yield was steady at 1.43 per cent.

In other trading, US benchmark crude oil rose 40 cents to USD 72.04 per barrel in electronic trading on the New York Mercantile Exchange.

It gained 60 cents to USD 71.64 on Friday. Brent crude, the international standard, picked up 38 cents to USD 73.89 per barrel.

The US dollar was at 110.10 Japanese yen, down from 110.27 on Friday. The euro rose to USD 1.1898 from USD 1.1861.

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Free Press Journal