Thursday, December 1 2022

NEW YORK (AP) — Stocks opened lower on Wall Street at the start of a holiday-shortened week. The S&P 500 was down 0.4% at the start of Monday, while declines in tech companies helped push the Nasdaq down 0.5%. The Dow Jones Industrial Average was barely in the green, thanks in large part to a surge in Disney stock prices. The entertainment giant jumped 9% after announcing it had ousted CEO Bob Chapek and brought in his predecessor, Bob Iger, to replace him. European and Asian markets were mostly down and oil prices fell, dragging energy companies lower. Treasury yields fell.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

Wall Street is tracking the decline in global stock markets to open a shortened holiday week as anxiety over the Federal Reserve’s plans for further interest rate hikes continues to weigh on investors.

Dow Jones Industrial Average futures lost 0.2% early Monday and S&P 500 futures slid 0.6%.

U.S. stock indices ended with a weekly loss on Friday after Fed official James Bullard jolted investors by suggesting that to bring down decades-high inflation, the central bank’s base rate could to be raised to almost double its already high level.

“Bullard has obscured the light on the rallies,” Mizuho Bank’s Tan Boon Heng said in a report.

Shares of Walt Disney Co. jumped 9% pre-market after the entertainment giant asked its former CEO Bob Iger to return to lead the company, firing his successor Bob Chapek in a move that has stunned Hollywood on Sunday night.

Iger said he was “thrilled” to be back and “extremely optimistic” about Disney’s future.

At midday in Europe, the FTSE 100 in London rose 0.1%, the DAX in Frankfurt fell 0.6% and the CAC 40 in Paris fell 0.2%.

Bullard, chairman of the St. Louis Federal Reserve Bank, suggested that the Fed’s benchmark rate may need to rise between 5% and 7%. That would fall from its current level of 3.75% to 4% after four hikes of 0.75 percentage points, or three times the usual Fed margin.

Investors fear that repeated rate hikes by the Fed and central banks in Asia and Europe this year to curb soaring inflation could tip the global economy into recession.

Traders are hoping signs of slowing economic activity and easing inflationary pressures could prompt the Fed to ease its plans. Fed officials, including Chairman Jerome Powell, have warned that rates may need to stay high for an extended period to extinguish inflation.

Traders expect the Fed to raise its key rate again at its December meeting, but with a narrower margin of 0.5 percentage points.

In Asia, the Hang Seng in Hong Kong lost 1.9% to 17,655.91. It had fallen more than 3% earlier after territory chief John Lee tested positive for coronavirus after returning from an Asia-Pacific meeting in Bangkok.

The Shanghai Composite Index fell 0.4% to 3,085.04 and the Nikkei 225 in Tokyo was down 0.2% to 27,944.79.

South Korea’s Kospi fell 1% to 2,419.50 and Sydney’s S&P-ASX 200 lost 0.2% to 7,139.30.

The Indian Sensex fell 0.9% to 61,132.92. New Zealand and Bangkok gained while Singapore and Jakarta fell.

In energy markets, benchmark U.S. crude fell 49 cents to $79.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.56 to $80.08 on Friday. Brent crude, the price basis for international oil trade, fell 51 cents to $87.11 a barrel in London. It fell from $2.16 to $87.62 the previous session.

The dollar rose to 141.91 yen from 140.36 yen on Friday. The euro fell to $1.0243 from $1.0331.

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McDonald’s reported from Beijing; Ott reported from Washington.

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