Wall Street slips as households become more nervous WSOC TV

NEW YORK – (AP) Another seemingly sluggish week on Wall Street came to a quiet end Friday on Wall Street, but major concerns continue to swirl beneath the surface.

The S&P 500 fell 6.54 points, or 0.2%, to 4,124.08 to finish a sixth straight week of moving less than 1%. The Dow Jones Industrial Average fell 8.89, or less than 0.1%, to 33,300.62, while the Nasdaq Index lost 43.76, or 0.4%, to 12,284.74.

Despite the seemingly calm moves for the overall market, there have been major swings beneath the surface amid concerns about a possible recessionhigh inflation and the US government is approaching what could be a catastrophic default on his fault.

Not only Wall Street is concerned. Sentiment among US consumers is falling, according to a preliminary study from the University of Michigan. That’s a concern because strong consumer spending has been one of the main drivers of recession avoidance as the economy slows.

Joanne Hsu, director of the Surveys of Consumer, pointed to the approaching deadline of June 1, when the US government could run out of money to pay its bills unless Congress allows it to borrow more.

If policymakers fail to resolve the debt ceiling crisis, these gloomy views on the economy will exacerbate the serious economic consequences of default, she said in a statement.

President Joe Biden and congressional leaders postponed a meeting set for Friday on the debt crisis to next week. The delay was announced as a sign of positive exchanges and staff-level talks are expected to continue throughout the weekend.

One area that was under heavy pressure this week and looking for stabilization was PacWest Bancorp’s stock. It has come under heavy scrutiny as Wall Street looks for the next possible US bank to fail after three high-profile collapses since March.

PacWest fell 3% after reversing from a gain in the morning. A day earlier, it slid sharply after announcing a flight of deposits from the previous week. The stock lost 21% last week.

Banks have weighed down under the weight of much higher interest rates, causing some customers to withdraw their deposits in search of higher yields, while prices for the investments they hold have also fallen.

The rates are so high because the Federal Reserve did she walk with one furious pace to reduce inflation. Reports this week suggested that inflation continues to moderate from last year’s peak, although it remains far too high for the comfort of households and regulators.

The hope on Wall Street is that declining inflation can convince the Fed not to raise rates again at its next meeting in June. That would provide some breathing room for both the economy, which has slowed under the weight of higher interest rates, and the financial markets, where prices have long since begun to fall.

Friday’s consumer confidence report highlighted a possible wildcard. It suggested that US households are anticipating a long-term inflation rate of 3.2%. That’s up from last month’s 3% and the highest level since 2011.

A concern at the Fed is that if expectations for high inflation become entrenched, it could change the behavior of shoppers and others across the economy, exacerbating inflation.

Treasury yields rose in the bond market as a result of the consumer sentiment report. The yield on the 10-year government bond made up for an earlier dip and climbed from 3.39% at the end of Thursday to 3.47%. It helps set rates for mortgages and other important loans.

The two-year interest rate, which moves more in line with the Fed’s expectations, rose from 3.90% to 3.99%.

News Corp. rose 8.5% after it reported a milder drop in earnings and revenue for the last quarter than analysts had expected.

That’s been the trend this season for earnings reporting. The reports are better than feared, but still weaker than a year earlier. Companies in the S&P 500 are on track to report a decline in earnings per share for the second straight quarter, something called an earnings recession.

First Solar rose 26.5% after announcing the purchase of Evolar AB, a European company, to accelerate development of high-efficiency tandem devices and other technologies.

On the losing side of Wall Street was Gen Digital, which fell 5.5% despite stronger-than-expected earnings and revenue for the last quarter.

Several Big Tech stocks were also weak. They and other high-growth stocks are seen as some of the hardest hit by high interest rates. Amazon fell 1.7% and was the heaviest weigher in the S&P 500.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.

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