Stocks slip on Wall Street, remain on track for weekly gains
By DAMIAN J. TROISE
AP Business Writer
NEW YORK (AP) — Stocks fell in afternoon trading after big swings between gains and losses earlier, but major indexes remained in the green for the week.
The S&P 500 fell 0.4% as of 12:27 p.m. Eastern. The benchmark index is holding on to a 0.8% gain for the week. It is coming off of a three-week losing streak.
The Dow Jones Industrial Average fell 132 points, or 0.4%, to 31,447 and the Nasdaq fell 0.6%.
Stocks have been mostly losing ground in recent weeks after the Federal Reserve indicated it will not let up anytime soon on raising interest rates to bring down the highest inflation in decades.
Big technology stocks were among the biggest losers. Apple fell 1.9% and Google’s parent company fell 1.8%.
Health care stocks made broad gains. Regeneron surged 18% after the company and partner Bayer reported encouraging study data on an anti-blindness drug.
Bond yields rose. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, fell to 3.30% from 3.27% late Tuesday. The two-year Treasury yield, which tends to track expectations for Fed action, rose to 3.50% from 3.44%.
Interest rates policies were in sharp focus for investors as the European Central Bank made its largest-ever rate increase, in line with moves from the Fed and other central banks to fight inflation. The bank’s 25-member governing council raised its key benchmark by three-quarters of a percentage point Thursday.
Meanwhile Fed Chair Jerome Powell reaffirmed the Fed’s commitment to keep rates high “until the job is done” in getting back down to its 2% goal.
“There is a record of failed attempts to get inflation under control, which only raises the ultimate costs to society,” he said during a conference on monetary policy by the Cato Institute, a think tank that promotes libertarian ideas.
The central bank has already raised rates four times this year and markets expect it to deliver another jumbo-sized increase of three-quarters of a percentage point at its next meeting in two weeks.
One of the Fed’s biggest fears is that households and businesses begin to expect inflation to stay high in the long term, which could lead them to start buying in a way that creates a vicious cycle making inflation even harder to shake.
The Fed has caught criticism for not taking inflation seriously sooner, and Powell said that setting interest-rate policy is an art as much of a science. A big question remains about whether the high inflation ravaging economies around the world is a one-off created by the pandemic or the start of something more persistent.
Markets in Europe were higher and markets in Asia were mixed. Japan’s benchmark Nikkei 225 surged 2.3%.
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AP Business Writer Stan Choe contributed to this report.
