Wall Street Ticks Higher After Treasury Yields Relax

NEW YORK (AP) -- Wall Street is ticking higher Friday as it nears the close of a mostly quiet week following its fireworks since the summer.

The S&P 500 was 0.4% higher in early trading and on track to end the week with a slight gain of less than that. That would follow its best week of the year, which itself came after months of sharp losses.

The Dow Jones Industrial Average was up 122 points, or 0.4%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 0.6% higher.

More companies reported better profits for the latest quarter than analysts expected, but the focus is swinging toward what companies will do later this year and beyond amid high interest rates and expectations for a slowdown in economic growth.

Illumina tumbled 13.3% even though the maker of DNA-sequencing and other technology products reported better results for the third quarter than expected. It cut its financial forecasts for the full year and said "the environment remains challenging."

Wynn Resorts also topped analysts' expectations for the latest quarter, but its stock fell 8.9% amid concerns about some weaker trends underneath the surface in Macao.

On the winning side of Wall Street was Hologic, which rose 6.5% after the maker of diagnostics and other products focused on women's health reported better profit than expected. Doximity was another winner, up 15.8% after it likewise reported stronger profit than forecast.

Such earnings reports have helped to support the stock market, but the main driver recently has been what's been happening in the bond market.

Treasury yields were giving back some of their gains from the prior day to release some of the pressure on Wall Street. That had Big Tech stocks helping to lead the way on Wall Street. They're typically among the biggest beneficiaries of easier yields, and a 1.3% rise for Apple and 2% climb for Nvidia were two of the strongest forces pushing upward on the S&P 500.

The yield on the 10-year Treasury fell to 4.58% from 4.64% late Thursday, and the yield on the two-year Treasury dropped back below 5%.

A jump in yields on Thursday knocked stocks lower to break an eight-day winning streak for the S&P 500, one of its longest in the last two decades. High interest rates and yields hurt prices for stocks and other investments, while slowing the economy broadly and raising the pressure on the financial system.

Since the summer, a run higher in the 10-year yield shook Wall Street and sent the S&P 500 down by 10% from its peak for the year. The 10-year yield briefly topped 5% to reach its highest level since 2007, as it caught up to the Federal Reserve's main overnight interest rate.

The federal funds rate is already above 5.25% and at its highest level since 2001 in hopes of choking inflation lower.

Yields took a sharp turn lower last week after Fed Chair Jerome Powell made comments that investors took as a hint that the central bank may be done hiking rates. Powell said the sharp jumps in yields since the summer could act like further rate hikes on their own, as long as they remained persistent. That in turn led to last week's big rally for stocks.

But Powell dashed some of the hopes building on Wall Street for an easier Fed after he said Thursday that no decisions on rates have been made yet. He said it "will not hesitate" to raise rates again if inflation doesn't appear to be heading back to the Fed's 2% target.

The central bank has been saying that its next moves will depend entirely on what incoming data about inflation and the economy say.

A report later Friday morning could be a key one. It will give a preliminary reading on how much inflation U.S. households are girding for. The Fed has said it wants to keep such expectations low, because they otherwise could feed into a vicious cycle that keeps inflation high.

In stock markets abroad, indexes were lower across most of Europe and Asia to follow up on Wall Street's losses from a day before.

In the oil market, crude prices regained some more of their sharp losses from earlier in the week. A barrel of benchmark U.S. crude rose 1.2% to $76.65. Brent crude, the international standard, added 1.2% to $80.99 per barrel. Both remain down by more than 4% for the week on worries about supplies outstripping demand.

A financial services business of China's biggest bank, ICBC, said it was hit this week by a ransomware attack that reportedly disrupted trading in the U.S. Treasury market.

New York-based Industrial and Commercial Bank of China Financial Services handles trades and other services for financial institutions. It said it had isolated affected systems and that trades had cleared by Thursday. It was unclear how much of an impact the attack had on Treasury market trading.