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World Shares are Mixed on Wall St. High05/16 05:00
Shares opened lower Thursday in Europe after most Asian benchmarks gained,
tracking a Wall Street rally driven by hopes that inflation is heading back in
the right direction.
(AP) -- Shares opened lower Thursday in Europe after most Asian benchmarks
gained, tracking a Wall Street rally driven by hopes that inflation is heading
back in the right direction.
The optimism came from a report Wednesday showing U.S. consumers had to pay
prices for gasoline, car insurance and everything else in April that were 3.4%
higher overall than a year earlier, less than March's inflation rate of 3.5%.
The slowdown was a relief after reports for the consumer price index, or
CPI, earlier this year had consistently come in worse than expected. The report
built on expectations that the Federal Reserve might cut its main interest rate
this year, the major preoccupation for most investors.
In Asian trading, Tokyo's Nikkei 225 index gained 1.4% to 38,920.26, even
after the government reported that the Japanese economy contracted at a 2%
annual rate in the January-March quarter.
Hong Kong's Hang Seng index rose 1.6% to 19,376.53. The Shanghai Composite
index edged 0.1% higher, to 3,122.40.
In Australia, the S&P/ASX 200 advanced 1.7% to 7,881.30 while South Korea's
Kospi climbed 0.8% to 2,753.00.
Taiwan's Taiex was up 0.7% and the Sensex in India fell 0.4%.
On Wednesday, the S&P 500 jumped 1.2% to top its prior high set a month and
a half earlier, closing at 5,308.15. The Dow Jones Industrial Average added
0.9% to 39,908.00, and the Nasdaq jumped 1.4% to 16,742.39, adding to its own
record set a day earlier.
On the losing end were GameStop and AMC Entertainment, as momentum reversed
following their jaw-dropping starts to the week. GameStop fell 18.9%, though
it's still up 126.5% for the week so far.
AMC Entertainment sank 20% after it said it will issue nearly 23.3 million
shares of its stock to wipe out $163.9 million in debt.
Another report Wednesday showed no growth in spending at U.S. retailers in
April from March. Economists had expected 0.4% growth.
Slowing retail sales could be seen as a positive for markets, because it
could reduce the upward pressure on inflation. But weaker U.S. consumer
spending would erode one of the main pillars keeping the economy out of a
recession. Pressure has grown particularly high on lower-income households.
Traders are now forecasting a nearly 95% probability that the Fed cuts its
main interest rate at least once this year, according to data from CME Group.
That's up from just below 90% a day before.
In other trading early Thursday, U.S. benchmark crude oil picked up 27 cents
to $78.90 per barrel in electronic trading on the New York Mercantile Exchange.
It gained 61 cents on Wednesday.
Brent crude, the international standard, was up 29 cents at $83.04 per
barrel.
The U.S. dollar fell to 154.73 Japanese yen from 154.88 yen. The euro fell
to $1.0872 from $1.0885.
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