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Stocks Drift on Wall Street            06/08 10:11

   Stocks are drifting Thursday, continuing this week's lull as Wall Street 
waits for several big events next week.

   NEW YORK (AP) -- Stocks are drifting Thursday, continuing this week's lull 
as Wall Street waits for several big events next week.

   The S&P 500 was virtually unchanged in early trading, and it hasn't moved by 
more than 0.4% in any day this week. The Dow Jones Industrial Average was 
basically flat at 33,665, as of 9:40 a.m. Eastern time, while the Nasdaq 
composite was 0.2% higher.

   GameStop was one of the bigger movers, falling 16.9% after ousting its CEO 
who was brought in to turn around the struggling video game retailer. The 
company, whose stock became a sensation in 2021 during the meme-stock craze, 
also reported weaker revenue for the latest quarter than expected.

   On the winning side was Carvana. It rose 18.4% after saying it expects to 
book a record amount of profit on each vehicle sold during the current quarter, 
among other improving trends.

   The overall market has been mostly calm after charging higher last week on 
data suggesting a long-feared recession may not be so imminent. The S&P 500 has 
climbed close to the edge of a bull market, rising nearly 20% above where it 
was in mid-October.

   But Wall Street's worries aren't over yet. The question is still whether a 
recession will hit before inflation falls enough to get the Federal Reserve to 
begin cutting interest rates. The Fed has already hiked short-term rates to 
their highest level since 2007 in hopes of driving down the worst inflation in 
generations.

   High rates do that by slowing the entire economy and dragging on prices for 
stocks and other investments. The Fed's sharp hikes have already helped cause 
several high-profile U.S. bank failures, as well as several months of 
contraction for the manufacturing industry.

   That's why Wall Street's focus is on next week. That's when the U.S. 
government will provide the latest monthly updates on inflation and the Fed 
will also announce its latest move on interest rates.

   "Inflation remains the name of the game," said Mike Loewengart, head of 
model portfolio construction at Morgan Stanley Global Investment Office.

   The expectation among traders is that the Fed will make no move on Thursday, 
which would be the first meeting where it hasn't hiked rates in more than a 
year. Even though inflation remains well above the Fed's comfort level, a pause 
would give the central bank more time to see how its fusillade of hikes has 
affected the economy. But traders see the Fed hiking rates again in July.

   A report on Thursday helped firm expectations that the Fed will not raise 
rates further next week. It showed that more workers filed for unemployment 
benefits last week than expected, the highest since October 2021.

   The job market has remained remarkably resilient in the face of higher 
interest rates, and weakness there could quickly get the Fed to take it easier 
on rates. Thursday's data helped push against pressure that may have built for 
tougher policy after central banks in Canada and Australia hiked their own 
rates recently.

   Economists warn the weekly data for jobless claims is prone to sharp shifts, 
and "we would caution against overemphasizing one week's data," said Rubeela 
Farooqi, chief US Economist at High Frequency Economics.

   Treasury yields gave up gains from earlier in the morning after the 
unemployment data hit the market. The yield on the 10-year Treasury fell to 
3.75% from 3.78% late Wednesday. It helps set rates for mortgages and other 
important loans.

   The two-year yield, which moves more on expectations for the Fed, fell to 
4.48% from 4.55%.

   In Europe, stock indexes were moving only modestly after revised figures 
released Thursday showed the European economy contracted slightly at the end of 
last year and beginning of 2023.

   That means the eurozone shrank for two straight quarters, which is what some 
call a "technical" recession.

   In Asia, Japan's benchmark Nikkei 225 sank 0.9% after the Japanese 
government revised its estimate for growth in the January-March quarter sharply 
higher, to 2.7%. That was above what analysts had expected and raises questions 
about whether Japan's central bank will keep its easy policies on interest 
rates.

   "While a higher growth reading may provide some room to consider a policy 
exit from the Bank of Japan, the central bank's stance could remain unmoved for 
now, with recent comments from the Governor Kazuo Ueda pointing to more 
wait-and-see," Yeap Jun Rong, a market analyst at IG said in a report.

 
 
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