Stocks wobble as traders weigh outlook for rates, inflation

<p><p>Stocks were wobbling in afternoon trading on Wall Street Thursday as investors consider the outlook for rising interest rates and inflation.</p></p><p><p>The S&amp;P 500 was moving between gains and losses throughout the morning and was up 0.1% as of 12:06 p.m. Eastern.</p></p><p><p>The Dow Jones Industrial Average was down 108 points, or 0.3%, to 36,297 and the Nasdaq rose 0.3%.</p></p><p><p>Banks made some of the biggest gains as bond yields continued to rise a day after <a href=”https://apnews.com/article/business-economy-inflation-jerome-powell-38bdf2e1df6f94e0e5a2a3bcc311a910″ target=”—blank”>the Federal Reserve indicated it was ready to raise interest rates to fight off inflation</a>.</p></p><p><p>The yield on the 10-year Treasury rose to 1.73% from 1.70% late Wednesday. Citigroup gained 3%. Higher bond yields allow banks to charge more lucrative interest on loans.</p></p><p><p>U.S. crude oil prices rose 2.6% and helped send energy stocks higher. ConocoPhillips rose 2.8%.</p></p><p><p>A mix of retailers and health care stocks fell. Tesla fell 2.2% and UnitedHealth Group fell 1.8%</p></p><p><p>Several big technology stocks, which have an outsized influence on the S&amp;P 500 because of their huge size, slipped. IBM was down 2.2%.</p></p><p><p>Investors have been closely monitoring rising inflation’s impact on consumers and businesses.</p></p><p><p>They have also been closely watching the Fed’s plans to dial back its ultra-low interest rate policies.</p></p><p><p>Minutes from the central bank’s meeting in December showed that policymakers expressed concerns that inflation, which has surged to four-decade highs, was spreading into more areas of the economy and would last longer than they previously expected.</p></p><p><p>The central bank has already said it will accelerate the reduction of its bond purchases, which have helped keep interest rates low.</p></p><p><p>Investors are watching for the impact from that pullback and gauging how quickly and how often the central bank will raise its benchmark interest rate.</p></p><p><p>Wall Street has also been weighing several economic reports this week.</p></p><p><p>On Thursday, The Institute for Supply Management reported that <a href=”https://apnews.com/article/business-22e5ca61ac5b872411b3fc5604c1f3df” target=”—blank”>growth in the U.S. service industry, where most Americans work, pulled back in December</a> after expanding at a record pace the previous two months.</p></p><p><p>The Labor Department reported that <a href=”https://apnews.com/article/coronavirus-pandemic-health-business-united-states-economy-a5e167e6deb4649aa1efaf8f319d14cf” target=”—blank”>the number of Americans applying for unemployment benefits rose last week</a> but remained at historically low levels, suggesting that the job market remains strong. The agency will release its monthly jobs report on Friday.</p></p>