US Stocks Drift Around Unchanged Friday

NEW YORK (AP) -- Wall Street is drifting around its lowest levels in almost two years Friday as the end nears for what's been a miserable month for markets around the world.

The S&P 500 was virtually unchanged after flipping between small losses and gains in early trading. Hovering around its weakest level since November 2020, the index is on pace for its sixth weekly loss in the last seven, one of its worst months since the early 2020 coronavirus crash and its third straight losing quarter.

The Dow Jones Industrial Average was down 52 points, or 0.2%, at 29,173, as of 9:55 a.m. Eastern time, and the Nasdaq composite was 0.3% higher.

The main reason all kinds of markets around the world have been dropping is fear about a possible recession, as interest rates rise in hopes of throttling high inflation lower.

The Federal Reserve has been at the forefront of the global campaign to hopefully slow economic growth and hurt job markets just enough to undercut inflation but not so much that it causes a recession. More data arrived Friday to suggest the Fed will keep its foot firmly on the brakes on the economy, raising the risk of it going too far and causing a downturn.

The Fed's preferred measure of inflation showed prices rising even faster than economists expected last month, while spending by consumers rebounded.

Higher interest rates knock down one of the main levers that set prices for stocks. The other, meanwhile, looks to be increasingly under threat as the slowing economy, high interest rates, high inflation and the suddenly surging value of the U.S. dollar weigh on corporate profits.

Nike slumped 11.6% for one of Wall Street's worst losses after its profitability weakened during the summer because it had to offer discounts to clear out suddenly overstuffed warehouses. The amount of shoes and gear in Nike's inventories swelled by 44% from a year earlier. The surge for the U.S. dollar against other currencies also hurt the company. Its worldwide revenue rose only 4%, instead of the 10% it would have if currency values had remained the same.

A long list of other worries are also hanging over markets, including increasing tensions between much of Europe and Russia following the invasion of Ukraine. A controversial plan to cut taxes by the U.K. government also sent bond markets globally spinning on fears it could make inflation even worse. Bond markets calmed a bit after the Bank of England mid-week pledged to buy however many U.K. government bonds are needed to bring yields back down.

Treasury yields eased a bit on Friday, letting off some of the pressure that's built on markets.

The yield on the 10-year Treasury fell to 3.70% from 3.79% late Thursday. The two-year yield, which more closely tracks expectations for Fed action, sank to 4.15% from 4.19%.

Stocks elsewhere around the world were mixed after a report showed that inflation in the 19 countries that use Europe's euro currency spiked to a record and data from China said that factory activity weakened there.

Inflation in Germany, France and other euro zone countries accelerated to 10% in September from the previous month's 9.1%, the statistics agency Eurostat reported. That was the highest since record keeping for the euro began in 1997. French and German stocks rose roughly 0.6%, while stocks in London slipped 0.3%.

In Asia, stocks in Shanghai fell 0.6% after surveys of manufacturers showed factory production, new export orders and manufacturing employment declined in September. That was in line with expectations that a Chinese manufacturing boom would fade due to weak global demand.