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Wall Street a Bit Steadier Friday      09/22 10:04

   Wall Street's ugly week is getting a bit of a reprieve, and stocks are 
ticking higher on Friday, but it's still heading for its worst week in six 

   NEW YORK (AP) -- Wall Street's ugly week is getting a bit of a reprieve, and 
stocks are ticking higher on Friday, but it's still heading for its worst week 
in six months.

   The S&P 500 was up 0.4% in morning trading, coming off a slide caused by the 
stock market's growing understanding that interest rates likely won't come down 
much anytime soon. The Dow Jones Industrial Average was up 62 points, or 0.2%, 
at 34,132, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.7% 

   Pressure has built on Wall Street as yields in the bond market climb to 
their highest levels in more than a decade. They've been rising for months and 
accelerated this week after the Federal Reserve indicated it's unlikely to cut 
its main interest rate by as much in 2024 as investors had hoped. The federal 
funds rate is at its highest level since 2001, which grinds down on investment 
prices as it undercuts high inflation.

   Yields were easing a bit Friday, which reduced the pressure on the stock 
market. The yield on the 10-year Treasury slipped to 4.43% from 4.50% late 
Thursday. It's still near its highest level since 2007.

   The two-year Treasury yield, which moves more closely with expectations for 
the Fed, dipped to 5.09% from 5.15%.

   When bonds are paying more in interest, investors are less willing to pay 
high prices for stocks. High rates hit particularly hard on stocks seen as the 
most expensive or forcing investors to wait the longest for big growth in the 

   Recently, that's meant pain for technology stocks. Nvidia trimmed its loss 
for the week to 5% after rising 1.6% Friday. The Nasdaq composite, which is 
full of tech and other high-growth stocks, is on track a loss of 2.8% this week.

   A couple tech-oriented companies got better news Friday after U.K. 
regulators gave a preliminary approval to Microsoft's restructured $69 billion 
deal to buy video game maker Activision Blizzard. It would be one of the 
largest tech deals in history, and shares of Activision Blizzard rose 1.8%.

   Microsoft rose 0.2%.

   Shares of automakers were rising even after the United Autoworkers said 
Friday it will expand its strike by walking out of 38 General Motors and 
Stellantis plants in 20 states. The union did not broaden its limited strike 
against Ford, which it said has met some of the union's demands in talks this 

   Ford rose 3.3%, and General Motors gained 0.7%.

   Auto workers are looking for raises in pay and other benefits, and a 
prolonged strike could put upward pressure on inflation if shortages send 
prices higher. The strikes are just one of the long list of challenges looming 
over the economy, including a possible U.S. government shutdown amid squabbling 
on Capitol Hill, the upcoming resumption of student-loan repayments and shaky 
economies around the world.

   Hanging above them all is the realization sinking in on Wall Street that 
interest rates may be staying higher for longer. The Fed indicated Wednesday it 
may raise its main interest rate one more time this year. From there, the most 
commonly predicted path by Fed officials would be half a percentage point of 
cuts in 2024 from a level of 5.50% to 5.75%. Three months ago, Fed officials 
were thinking a full percentage point of cuts may be the likeliest outcome.

   High rates drag down inflation by intentionally slowing the economy and 
denting prices for investments. They also take a notoriously long time to take 
full effect and can cause damage in unexpected, far-ranging corners of the 
economy. Earlier this year, high rates helped lead to three high-profile 
collapses of U.S. banks.

   Economists have already begun pushing out their forecasts for the first cut 
to interest rates by the Fed next year. EY Chief Economist Gregory Daco, for 
example, now expects 0.75 percentage points of cuts in 2024, down from his 
earlier forecast for a full percentage point.

   He says recent reports showing a cooldown in the job market suggest the 
economy may experience a "controlled landing" from high inflation, instead of 
the hard landing of a severe recession that some investors fear will result 
from interest rates staying higher for longer.

   A report on Friday suggested business activity across the economy is 
stagnating. A preliminary measure of output compiled by S&P Global slipped to a 
seven-month low as businesses in services industries lost momentum. Demand was 
muted for both services and manufacturing providers.

   In stock markets abroad, Chinese indexes rose following a report by 
Bloomberg saying regulators are considering allowing foreigners to own more 
shares. The report cited unnamed people "familiar with the matter."

   Also on Friday, the U.S. Treasury Department and China's Ministry of Finance 
launched a pair of economic working groups in an effort to ease tensions and 
deepen ties between the nations.

   Hong Kong's Hang Seng jumped 2.3%, while stocks in Shanghai rose 1.5%. 
Indexes elsewhere in Asia were lower, while European stocks were mixed.

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