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US Stocks Jump as Rate Hopes Rise 08/07 09:47
Stocks rose in morning trading on Wall Street Friday and Treasury yields
fell after the government reported that employers unexpectedly cut 23,000 jobs
last month.
NEW YORK (AP) -- Stocks rose in morning trading on Wall Street Friday and
Treasury yields fell after the government reported that employers unexpectedly
cut 23,000 jobs last month.
The S&P 500 rose 0.4% and is hovering around the record it set on Tuesday.
The Dow Jones Industrial Average rose 114 points, or 0.2%, as of 9:55 a.m.
Eastern time. The Nasdaq composite rose 1%. Every major index is on track for
weekly gains.
Technology stocks, with their big market values, did much of the heavy
lifting for the broader market. They are often the heaviest weights determining
the market's direction. Nvidia jumped 1.3% and Broadcom rose 1.1%.
The bond market reacted more strongly to the weaker signal on the job
market, which can be seen as allowing the Federal Reserve more time before
raising interest rates to fight inflation.
The yield on the 10-year Treasury fell to 4.63% from 4.67% just prior to the
jobs update. The yield on the two-year Treasury, which more closely tracks
expectations for Fed action on interest rates, fell to 4.19% from 4.22% prior
to the report's release.
Overall, the report paints a dimmer picture of the jobs market, which has
been one of the brighter areas of the economy amid rising inflation and worries
about household spending. It included a revision to the figures for June and
May that involved slashing a combined 103,000 jobs from payrolls for those
months.
The Fed has been holding interest rates steady amid worries about hotter
inflation, especially fueled by a rise in oil prices because of the U.S. war
with Iran. Wall Street expects at least one rate increase by the end of the
year. A weakening jobs market could make matters more complicated for the Fed,
which has to balance supporting job growth with fighting inflation.
Raising interest rates can help tame inflation by slowing economic growth. A
weaker jobs market, though, could become even more battered under higher
interest rates as businesses find it more difficult to expand under increased
borrowing rates.
Businesses, and Wall Street, prefer lower interest rates because it can help
boost investments. That might bolster a weakened jobs market, but it could
worsen already stubborn inflation.
Oil prices edged lower. The price of Brent crude, the international
standard, fell 0.6%, to $82.07 a barrel.
Markets in Europe gained ground and markets in Asia were mixed.
___
Associated Press business writer Elaine Kurtenbach contributed to this
report.
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