Stocks are slightly higher in early trading on Wall Street as a three-day rally loses momentum. The S&P 500 rose less than 0.1% in the first few minutes of trading Wednesday, led once again by technology companies. The recent strong streak for the market still hasn’t gotten the S&P 500 back to where it was before taking a 6% tumble last Thursday.
Investors will be watching another day of Congressional testimony by Federal Reserve Chair Jerome Powell. A day earlier Powell warned that the U.S. economy faces a deep downturn with “significant uncertainty” about the timing and strength of a recovery.
World markets followed Wall Street higher Wednesday on hopes for a global economic recovery.
London and Frankfurt opened higher. Benchmarks in Shanghai, Hong Kong and Seoul rose after early losses. Tokyo retreated after Japan reported its exports sank in May.
Global share prices have regained most of this year’s losses as investors count on a rebound from the coronavirus pandemic despite rising infections in the United States, Brazil and some other major countries.
Analysts warn the gains are bigger and faster than justified by the uncertain economic outlook.
Futures for the S&P 500 index and the Dow Jones Industrial Average were up 0.4% after the benchmark S&P 500 index added 1.9% on Tuesday for its third daily gain. That followed data showing U.S. retail spending was stronger than expected.
U.S. retail figures showing an 18% gain over the previous month are encouraging but still $50 billion below what might have been expected without the coronavirus, said Rob Carnell of ING in a report.
“We don’t imagine markets will share this nuanced view.” said Carnell. “They will likely make the most of any good news and continue to be dismissive of any bad news.”
On Wednesday in London, the FTSE 100 opened up 0.7% at 6,287.31 and Frankfurt’s DAX added 0.5% to 12,379.94. The CAC 40 in France advanced 0.5% to 4,979.13.
In Asia, the Shanghai Composite Index edged 0.1% higher to 2,935.87 while the Hang Seng in Hong Kong added 0.6% to 24,481.41.
The Nikkei 225 in Tokyo shed 0.6% to 22,455.76 after the government reported May exports fell 28.3% from a year earlier in their biggest decline since the 2008 global crisis.
In Seoul, the Kospi closed up 0.1% at 2,141.05. India’s Sensex lost 0.4% to 33,453.82.
Sydney’s S&P-ASX 200 gained 0.8% to 5,991.80. New Zealand and Southeast Asia markets advanced.
Also Wednesday, Singapore reported May exports fell 25% from a year earlier.
Financial markets have been underpinned by promises from the Fed and other central banks to inject more money into economies through bond purchases and other steps.
However, analysts are skeptical about the U.S. stock market’s run since it began climbing after hitting a bottom in late March, down 34% from its record.
Investors have been pushing up shares of companies that would benefit from a reopening economy.
In energy markets, benchmark U.S. crude oil for July delivery lost 29 cents to $38.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.26 on Tuesday to settle at $38.38. Brent crude, the benchmark for international prices, shed 16 cents to $40,80 per barrel in London. It rose $1.24 the previous session to $40.96 a barrel.
The dollar gained to 107.39 yen from Tuesday’s 107.33 yen. The euro declined to $1.1230 from $1.1266.