US stocks edge further from their record as oil prices rise
NEW YORK (AP) — The U.S. stock market is edging a bit further from its record high Thursday.
The S&P 500 dipped 0.2% and is on track for a second modest loss after setting its all-time high. The Dow Jones Industrial Average was up 4 points, or less than 0.1%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.
Stocks felt the pressure of a 4.6% rise for the price of a barrel of Brent crude oil, the international standard, to $104.77. It’s been swinging between $96 and nearly $110 over the last month on uncertainty about when the war with Iran will allow the global energy industry to return to normal.
Drops for influential stocks in the computer chip industry also weighed on Wall Street. A fall of 0.7% for Nvidia was one of the heaviest weights on the S&P 500, while Broadcom sank 2%.
They dropped even though a bellwether for the artificial-intelligence chip industry, Taiwan Semiconductor Manufacturing Co., reported growth for September that suggested its revenue for the latest quarter was strong enough to top analysts’ expectations. TSMC's stock that trades in the United States fell 0.9%.
Expectations are high for stocks that have surged in price thanks to the frenzy around AI technology. They need to report continued, strong growth in profits to justify the big moves their stock prices have already made.
The same is true for companies outside of technology. The S&P 500, which sits at the heart of many 401(k) accounts, was able to set a record this week in large part because analysts expect companies in the index to deliver nearly 30% growth in their earnings per share this upcoming reporting season.
That’s a high bar.
Levi Strauss on late Wednesday reported a bigger profit for its latest quarter than analysts expected, while raising its forecast for profit over its full fiscal year. But its stock nevertheless fell 3.8% after its growth in revenue fell short of analysts’ expectations.
PepsiCo, in contrast, rose 2% after reporting slightly stronger profit and revenue for the latest quarter than analysts expected and highlighted strength outside of North America. That was even though it also cut its forecast for an underlying measure of profit this fiscal year.
Expectations are likely not as high for PepsiCo as for other companies because its stock came into the day with a drop of nearly 14% for the year so far. That compares with gains of nearly 15% for the S&P 500 and 27.3% for Nvidia over the same time.
In the bond market, Treasury yields were unsteady.
The yield on the 10-year Treasury briefly got above 5.35% in the morning before dropping back to 5.28%, where it was late Wednesday.
Despite the swings, it remains well above its 3.97% level from before the war with Iran began and near its highest level since 2002 because of worries about high inflation, big government debt loads and other factors.
Also helping to support yields was the latest report to suggest the U.S. economy is continuing to chug along. Fewer U.S. workers applied for unemployment benefits last week, which may mean companies are laying off fewer workers.
Higher yields slow the economy by making it more expensive for everyone to borrow money. High yields also put downward pressure on prices for stocks and other investments, and those seen as the most expensive often feel the brunt.
In stock markets abroad, South Korea’s Kospi fell 2.6% for one of the world’s larger losses. It was hurt by a 2.4% drop for Samsung Electronics, one of its two dominant stocks. The tech giant said its operating profit for the latest quarter likely soared 782% from a year earlier, but that wasn’t enough to satisfy investors.
Indexes fell across much of the rest of Asia and Europe.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
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