High rates have already hit the manufacturing and housing industries. A report Tuesday showed that homebuilders broke ground on fewer new homes in August than economists expected. The 11.3 per cent drop from July’s level was much worse than the 0.8 per cent forecasted. But activity for building permits, a possible indicator of future activity, rose more than expected.
On Wall Street, shares of Instacart climbed 12.3 per cent in their first day of trading. The company raised $US660 million in its initial public offering, which priced the stock at $US30 per share.
It arrived on the heels of another highly anticipated IPO by chip designer Arm Holdings. The offerings could mark a warming environment for IPOs, which fell off sharply after stocks tumbled last year with worries about higher interest rates. Arm jumped in its first day of trading on Thursday but has since followed that with three days of losses.
The Walt Disney Co. fell 3.6 per cent for one of the largest losses in the S&P 500 after it announced a big investment plan for its theme parks and cruise lines. It plans to double its investment in its parks, experiences and products business to $US60 billion over the next 10 years versus the prior decade.
Shares of AutoZone slipped 1.9 per cent despite its reporting stronger profit for the latest quarter than analysts expected. The auto parts retailer said growth in its domestic commercial business was weaker during the quarter than expected.
On the winning end of Wall Street was US Steel, which rose 3.7 per cent It said it expects to deliver strong results for the summer, above what analysts were expecting. That’s even with the impact on steel demand expected because of the limited strike by the United Autoworkers against Detroit’s Big three automakers.
Ford and General Motors held steadier after falling a day earlier, as the strike against them continues. The leader of the UAW said late Monday its limited strike could expand unless “serious progress” toward a new labour deal is made by Friday at noon. Ford rose 1.8 per cent, and GM rose 1.9 per cent.
In the bond market, the yield on the 10-year Treasury rose to 4.36 per cent from 4.30 per cent late Monday. It’s near its highest level since 2007.
The two-year Treasury yield, which moves more on expectations for the Fed, rose to 5.11 per cent from 5.05 per cent.
Yields have been climbing with expectations that rates may stay higher for longer, as well as with crude oil prices.
The price for a barrel of benchmark US crude swung through the day, rising more than 1 per cent at one point before ending the day down 28 cents at $US91.20. It’s climbed roughly 13 per cent this year as oil-producing countries curtail some production in hopes of boosting its price.
Brent crude, the international standard, fell 9 cents to $US94.34 per barrel.
In stock markets abroad, indexes were mixed across Asia and Europe.
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