ASX set to edge up, Wall Street drifts; Oil falls

Wall Street is drifting in mixed trading as technology stocks recover some of their losses from late last week and oil prices sink.

The S&P 500 added 0.2 per cent in afternoon trading. The Dow Jones was down 25 points, or 0.1 per cent, in mid-afternoon trade, and the Nasdaq composite was 0.5 per cent higher. All three are near their all-time highs set a week ago.

Wall Street has made a middling start to the week.Credit: Bloomberg

The Australian sharemarket is set to rise, with futures at 4.55am AEST pointing to a rise 13 points, or 0.2 per cent, at the open. The ASX climbed by 0.9 per cent on Monday. The Australian dollar was fetching US65.79¢ at 5.10am AEST.

Big Tech stocks edged higher to lead the way on Wall Street. Amazon added 0.6 per cent following its 5.1 per cent drop last week, and Microsoft rose 0.6 per cent to recover some of its 1.2 per cent decline. While the moves were modest, they were still two of the strongest forces lifting the S&P 500 Monday because they’re two of Wall Street’s most valuable stocks.

On the losing end of the market were companies in the oil business, which were hurt by slumping crude prices. Drops of 2.8 per cent for Exxon Mobil and 2.7 per cent for Chevron were two of the heaviest weights on the S&P 500.

This week’s highlight for the market is scheduled to arrive on Friday, when a report will be due about how many jobs US employers created and destroyed last month. The hope is that it will be balanced enough to keep the Federal Reserve on track to continue cutting interest rates.

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The Fed just delivered its first cut of the year, and officials have penciled in more through the end of next year. That’s critical for investors because US stocks have shot to records from a low in April in large part because of expectations for several cuts from the Fed. Easier rates can boost the economy and make investors more willing to pay high prices for stocks and other investments.

If Friday’s job numbers prove too strong, they could make the Fed less willing to cut rates. That could hurt stocks, which are already facing criticism that they’ve become too expensive following their big rally. If the job numbers are too weak, they could mean a recession is coming that would hurt stock prices on its own.

One wild card may pop up in the interim: The US government is heading toward a deadline that could result in its shutdown.

The United States has already has many such shutdowns, and they’ve made minimal waves in the past for the US stock market and for the economy. But another shutdown could delay the collection and release of economic data, such as on jobs and inflation. Without those reports, increasing uncertainty on Wall Street could make markets more twitchy.

This shutdown may also be different because the White House may push for large-scale firings of federal workers this time around.

“We believe that a shutdown will have only a small and transitory economic impact, but it may spur some financial market volatility,” according to Jennifer Timmerman, investment strategy analyst at Wells Fargo Investment Institute.

On Wall Street, Electronic Arts rallied 4.6 per cent after the video game maker confirmed rumours of a megabuyout. A group of investors will pay $US210 in cash for each share of EA. Based on the number of shares it had outstanding in July, the price tag would be around $US55 billion ($84 billion), and the companies are calling it history’s largest all-cash deal to take a business private.

CSX chugged 3.7 per cent higher after the railroad operator named Steve Angel as its chief executive. Angel was previously CEO of Linde and its predecessor Praxair, and he is replacing Joe Hinrichs, who also left CSX’s board.

Stocks in the marijuana-related business soared after President Donald Trump posted a video calling hemp-derived CBD a “game changer” in improving the quality of life for seniors. Tilray Brands jumped 46 per cent, and Canada’s Canopy Growth rose 17.3 per cent.

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In stock markets abroad, indexes mostly rose in Europe and Asia.

The FTSE 100 in London added 0.2 per cent as GSK climbed 2.2 per cent after the pharmaceutical giant said CEO Emma Walmsley will step down December 31 following more than eight years at the helm. Luke Miels, currently GSK’s chief commercial officer, will replace the 56-year-old Walmsley, who was the first woman to lead a major pharmaceutical company

The Hang Seng in Hong Kong jumped 1.9 per cent, and Tokyo’s Nikkei 225 fell 0.7 per cent for two of the world’s bigger moves.

Oil prices slumped roughly 4 per cent. Analysts said reports that oil-producing nations in the OPEC+ group might raise their production limits next month added to the notion that too much supply is washing around the world.

Gold topped $US3850 per ounce to continue its record-breaking run amid expectations for cuts to interest rates by the Fed and worries about potentially high inflation and the mountains of debt that governments worldwide are carrying.

In the bond market, the yield on the 10-year Treasury eased to 4.14 per cent from 4.20 per cent late Friday.

AP

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