Stocks open mixed, oil prices climb as OPEC meets

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A forex trader walks past screens showing the Korea Composite Stock Price Index (KOSPI), center, and the exchange rate of the South Korean won to the US dollar, right, in the foreign exchange trading room of KEB Hana Bank headquarters in Seoul, South Korea, Thursday, June 2, 2022. Asian stocks fell on Thursday, echoing a retreat on Wall Street as investors worried about rising interest rates and of rising coronavirus cases in parts of the region. (AP Photo/Ahn Young-joon)

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Stocks got off to a mixed start on Wall Street on Thursday, with weakness in tech companies offsetting gains elsewhere in the market. Microsoft weighed on the tech sector with a 3% loss after it cut its financial forecast for the current quarter, citing unfavorable changes in exchange rates. The S&P 500 fell 0.2%. The Dow Jones Industrial Average and the Nasdaq fell by similar amounts, while stocks of smaller companies rose. Crude oil prices were slightly higher as the OPEC oil cartel and allied nations including Russia considered changes in production levels as gas prices hit a new record high in the United States.

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

NEW YORK (AP) — Wall Street pointed to gains in premarket trading and oil prices fell ahead of an OPEC meeting where oil-producing nations will decide how much crude to produce, gasoline prices hit record highs in the United States on Thursday.

Futures on the S&P 500 and Dow Jones industrials gained 0.5% after mixed trading in global markets.

U.S. oil prices fell more than $3 a barrel ahead of the first OPEC meeting since Europe imposed sanctions on Russian crude for that country’s invasion of Ukraine.

The Financial Times reported that Saudi Arabia had indicated to its Western allies that it could increase production to cover any substantial drop in Russian production.

Supply bottlenecks would persist, Oanda’s Jeffrey Halley said in a commentary, “but that would be rare good news for the global economy and the fight against inflation.”

U.S. gasoline prices hit a new record high on Thursday, with the average price at the pump costing $4.71 a gallon, according to the AAA Auto Club Federation. Rising oil and gas prices have contributed to the inflation that plagues the United States and Europe and undermines consumers’ purchasing power.

OPEC, whose de facto leader is Saudi Arabia, has so far taken the position that it cannot supply more oil to make up for lost production due to sanctions on Russia. That, combined with a European Union agreement to end most oil imports from Russia following its invasion of Ukraine, has helped keep prices high. Gasoline and diesel prices were also supported by a lack of refining capacity to turn crude into fuel.

In Europe, the French CAC 40 gained 1.0% in early trading, while the German DAX gained 0.8%. Markets were closed in Britain for the Platinum Jubilee marking Queen Elizabeth’s 70 years on the throne.

In China, strict COVID-19 restrictions are back in Hong Kong as infections rise, while they are gradually being lifted in Shanghai. China is sticking to a “zero-COVID” strategy that requires lockdowns, mass testing and isolation of people who are infected or who have been in contact with someone who tested positive.

Japan’s benchmark Nikkei 225 fell 0.2% to end at 27,413.88. Australia’s S&P/ASX 200 fell 0.8% to 7,175.90. The South Korean Kospi slipped 1.0% to 2,658.99. Hong Kong’s Hang Seng fell 1.0% to 21,082.13, while the Shanghai Composite reversed earlier losses, gaining 0.4% to 3,195.46.

Daily market swings have become routine amid fears that overly aggressive rate hikes by the US Federal Reserve could push the US economy into a recession. While this may avoid stifling the economy, higher rates still put downward pressure on stocks and other investments. Meanwhile, high inflation is eating away at corporate earnings, while the war in Ukraine and anti-COVID-19 restrictions slowing business in China have also weighed on markets.

The Fed has signaled that it may continue to raise its main short-term interest rate to double the usual amount at upcoming meetings in June and July. Last week, speculation mounted that the Fed might consider a pause at its September meeting, which helped equities rise. But those hopes dwindled after Wednesday’s manufacturing report from the Institute for Supply Management.

It showed that US manufacturing growth accelerated last month, contrary to economists’ expectations of a slowdown. A separate report said the number of job vacancies across the economy fell slightly in April, but remained much higher, at 11.4 million, than the number of unemployed.

Wednesday marked the start of the Fed’s program to cut some of the trillions of dollars in Treasuries and other bonds it amassed during the pandemic. Such a decision should put upward pressure on longer-term rates.

The 10-year Treasury yield rose to 2.92% from 2.84% just before the report was released.

Benchmark U.S. crude fell $3.11 to $112.15 a barrel. Oil prices rose 0.5% to settle at $115.26 on Wednesday. Brent crude, the international standard, fell $3.09 to $113.20 a barrel.

In currency trading, the US dollar slipped to 129.63 Japanese yen from 130.15 yen. The euro fell from $1.0649 to $1.0693.


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Felix J. Dixon