NEW YORK (AP) — U.S. stocks fell Wednesday, paring gains in May that were on track to be Wall Street's best month in six months.
The S&P 500 was down 0.5% in midday trading, down from a record high it reached last week. The Dow Jones Industrial Average was down 354 points, or 0.9%, as of 11 a.m. Eastern time, and the Nasdaq Composite was down 0.3%, a day after hitting a record high.
American Airlines Group The airline's shares were led lower after it cut its outlook for spring profits and other financial targets. The company said fuel costs may be slightly lower than previously thought, but key revenue trends may be lower as well. It also announced that Chief Commercial Officer Vas Raja would leave the company. Shares fell 14.7%.
ConocoPhillips is Acquires Marathon Oil The all-stock deal values the company at $22.5 billion and has $5.4 billion in net debt. It's the latest big acquisition in an industry that has seen several acquisition announcements recently. Marathon Oil rose 9.7%.
Advance Auto Parts Inc. fell 6.4 percent after its latest quarterly results and revenue fell slightly short of analysts' expectations. The company said the industry had gotten off to a slower-than-expected start to the year.
Further increases in longer-term Treasury yields also weighed on the broader stock market, with the 10-year Treasury yield rising to 4.60% from 4.54% late Tuesday. Though still falling this month, it has been gradually climbing since dropping below 4.40% in mid-May.
Rising Treasury yields can drive down the prices of all kinds of investments, but they can especially hit utility and real estate stocks. Higher bond yields could scare away income-seeking investors who might buy these stocks for their relatively high dividends.
Utilities in the S&P 500 fell 1.4% overall, while real estate investment trusts dropped 1.2%, the biggest losers in the market.
Fluctuations in Treasury yields this month came as traders recalibrated their expectations of when the Federal Reserve will cut interest rates. Start lowering key interest ratesThis is the highest level in more than 20 years.
Wall Street has always wanted interest rates to be cut because it can boost investment prices and take some of the downward pressure off the economy, but traders have been forced to delay any cuts. Overly optimistic predictions With inflation proving completely unchecked, the Fed will likely be forced to cut interest rates several times this year.
The Fed is trying to strike a balance between squeezing the economy with interest rates high enough to completely contain inflation, but not so much that it leads to widespread layoffs.
Despite concerns that cracks are appearing in U.S. consumer spending, Especially low-income earnersEconomists at BNP Paribas expect a healthy job market, slowing inflation, and even profits from some crypto investors to bolster the economy's main engine.
“American consumers have defied the pressures of high interest rates and inflation, as well as fears about economic uncertainty,” said Elena Shulyatyeva, senior U.S. economist at BNP Paribas.
The U.S. stock market continues to break records as artificial intelligence technology stocks continue to rally despite concerns about interest rates remaining high. Excessive profit report That helped fuel the enthusiasm, but the momentum won't last forever: The company's shares fell in morning trading before climbing a modest 0.4%, the lowest since it reported earnings a week ago.
Dick's Sporting Goods Inc. was a winner on Wall Street, sending shares up 16.4% after its most recent quarterly profit and sales beat analysts' expectations. The company also raised its full-year profit forecast.
Chewy, the online pet supplies retailer, also reported better-than-expected profits for its most recent quarter, sending its shares up 29.6%. The company also said it would return up to $500 million to shareholders through share buybacks.
On the international market front, Asian and European stock indexes were mostly lower: Hong Kong's Hang Seng Index fell 1.8%, South Korea's KOSPI dropped 1.7% and France's CAC 40 fell 1.4%.
The Shanghai stock market was little changed after the International Monetary Fund raised its economic growth forecast for 2019. China's economic outlook, The ministry said it expected China, the world's second-largest economy, to grow at an annualized rate of 5 percent this year, but warned that consumer-friendly reforms were needed to sustain strong, high-quality growth.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
