Thursday’s disappointing data followed an encouraging update earlier in the week on prices at the consumer level. A separate report on Thursday, meanwhile, said fewer US workers applied for unemployment benefits last week. That’s a good sign for workers, indicating that layoffs remain relatively low at a time when job openings have become more difficult to find.
But a solid job market could also give the Fed less reason to cut interest rates in the short term.
The data helped send Treasury yields higher in the bond market. The yield on the 10-year Treasury climbed to 4.29 per cent from 4.20 per cent just before the data reports’ release and from 4.24 per cent late Wednesday.
On Wall Street, Tapestry helped lead the market lower as the company behind the Coach and Kate Spade New York brands feels the pressure of tariffs.
It detailed how much profit it could lose in its upcoming fiscal year because of tariffs and duties, and its forecast for profit fell short of analysts’ expectations even though its forecast for revenue came in above. Its stock fell 14 per cent, despite it also reporting a stronger profit for the latest quarter than analysts expected.
Deere fell 6.4 per cent even though the machinery maker likewise delivered a better profit than expected. There, too, the focus was on where profits are heading in the future. It cut the top end of its forecasted range for profit this fiscal year and said its customers “remain cautious amid ongoing uncertainty.”
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On the winning side of Wall Street was Fossil Group, which jumped 26 per cent after the seller of watches and other accessories reported better profit than expected. It also announced a plan to strengthen its finances, while trimming its forecast for how much it expects worldwide net sales to fall this year.
Gains for a few Big Tech stocks also helped to limit Wall Street’s losses. Amazon rose 3.5 per cent to add to its gains from the prior day when it announced same-day delivery of fresh groceries in more than 1,000 cities and towns.
Because Amazon is so huge, with a market value of $US2.45 trillion ($3.8 trillion), its stock carries much more weight on the S&P 500 than the typical company’s.
In stock markets abroad, indexes were mixed across Asia and Europe ahead of a key meeting between US President Donald Trump and Russian President Vladimir Putin on Friday.
AP
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