NEW YORK (AP) — Stocks are off to a weak start on Friday, continuing a dismal streak that pushed Wall Street into a bear market last month as traders worry that inflation will be tough to beat and that a recession could be on the way as well. The S&P 500 slipped 0.2% in the early going. It’s down 21% since hitting its most recent record high at the beginning of the year. The market just wrapped up its worst first half of a year in decades. The Dow Jones Industrial Average fell 0.2% and the Nasdaq lost 0.6%. Crude oil prices rose.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street is pointing toward more losses when markets open for the first day of a new quarter with new data revealing corporate sentiment in Japan low and inflation in Europe at record highs.
Futures for the Dow Jones Industrial Average slipped 0.4% Friday, as did futures for the S&P 500.
Annual inflation in the eurozone’s 19 countries hit 8.6% in June, surging past the 8.1% recorded in May, according to the European Union statistics agency, Eurostat. Inflation is at its highest level since recordkeeping for the euro began in 1997.
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Shares in Europe pivoted from gains to losses on the report. Paris’s CAC 40 and Germany’s DAX both inched down 0.3% and Britain’s FTSE 100 was 0.1% lower.
Shares in Asia also fell after a quarterly report by Japan’s central bank rekindled worries about the world’s third largest economy.
In the Bank of Japan “tankan” survey, the headline index for large manufacturers was 9, down from 14 in the previous quarter and the second straight quarter of declines. The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.
The numbers for non-manufacturing indicators were better, but worries are growing because of pressures from a weakening Japanese yen.
In a bit of positive news, a survey by a Chinese business magazine, Caixin, found China’s factory activity expanded in June at its strongest rate in 13 months following an easing of anti-virus restrictions that shut down Shanghai and other industrial centers..
A monthly purchasing managers’ index issued by Caixin rose to 51.7 from 48.1 in May on a 100-point scale on which numbers above 50 show activity increasing. New orders rose while employment declined for a third month.
Japan’s benchmark Nikkei 225 dropped 1.7% to finish at 25,935.62. Australia’s S&P/ASX 200 edged down 0.4% to 6,539.90. South Korea’s Kospi lost 1.2% to 2,305.42. The Shanghai Composite fell 0.3% to 3,387.64.
Hong Kong’s markets were closed for a holiday.
Rising inflation is behind much of the slump for the broader market this year as businesses raise prices, squeezing consumers.
A potential deal to sell Kohl’s department store chain fell apart Friday, with the company citing a difficult retail environment as the main hurdle. Shares in Wisconsin-based Kohl’s tumbled 19% before the bell. Potentially signaling anxiety levels in the retail sector with consumers pulling back, it was the second time this week that a major company gave up on a potential sale.
The Federal Reserve and other central banks have been aggressively raising interest rates to try and slow economic growth to cool inflation. Higher rates risk a recession if they slow economies too much. They also hurt prices for stocks, bonds, cryptocurrencies and other investments.
A measure of inflation that is closely tracked by the Fed rose 6.3% in May from a year earlier, unchanged from its level in April. The report from the Commerce Department also said consumer spending rose at a sluggish 0.2% rate from April to May.
The update follows a worrisome report earlier this week that consumer confidence had slipped to its lowest level in 16 months. The government also reported that the U.S. economy shrank 1.6% in the first quarter. Weak consumer spending was a key part of that contraction.
The OPEC oil cartel and allied producing nations decided Thursday to increase production of crude oil, but the amount will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.
In energy trading, benchmark U.S. crude added $3.01 to $108.77 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $3.17 to $112.20 a barrel.
In currency trading, the U.S. dollar slipped to 135.23 Japanese yen from 135.75 yen. The euro cost $1.0419, down from $1.0484.
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