Wall Street eyes fresh record, ASX set to dip

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The yield on the 10-year Treasury fell to 4.21 per cent from 4.29 per cent late Monday. The two-year yield, which more closely tracks expectations for the Fed, fell to 4.70 per cent from 4.77 per cent.

A survey of global fund managers by Bank of America showed they’re the most optimistic about stocks since the autumn of 2021, with relatively little hiding out in cash and allocations heavy to stocks. Fewer managers are also calling for a “hard landing” where the economy tumbles into a bad recession.

The downside of Tuesday’s weaker-than-expected data is that it could be a warning signal that the main engine of the US economy, spending by households, is cracking. Alongside May’s numbers, the US government also revised down figures for retail sales in prior months.

Inflation is still high, even if it’s slowed since its peak, and lower-income households in particular are struggling to keep up with the more expensive prices.

Lennar, a homebuilder, fell 5 per cent after co-CEO Stuart Miller said “challenged consumer sentiment” and swings in interest rates are testing the company. Its stock fell even though it reported better profit for the latest quarter than analysts expected.

Shares of Fisker more than halved to 2 cents after the electric-vehicle maker filed for Chapter 11 bankruptcy protection. The company cited “various market and macroeconomic headwinds.”

On the winning side of Wall Street was La-Z-Boy, which jumped 19.4 per cent after reporting stronger profit and revenue for the latest quarter than expected. The furniture maker said the current quarter is also off to a good start, with a solid Memorial Day, even as high interest rates keep a lid on housing activity.

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Silk Road Medical jumped 24 per cent after Boston Scientific agreed to buy the medical device company in a cash deal valuing it at roughly $US1.26 billion, including its cash. Boston Scientific added 0.2 per cent.

All told, the S&P 500 rose 13.80 points to 5,487.03. The Dow gained 56.76 to 38,834.86, and the Nasdaq composite edged up by 5.21 to 17,862.23.

In stock markets abroad, indexes continued to recover in Europe following last week’s rout. Surprise victories by far-right parties in elections had raised worries about the potential for mounting debt loads at the French government in particular.

France’s CAC 40 rose 0.8 per cent for a second straight gain.

In Asia, Japan’s Nikkei 225 rose 1 per cent. Heavyweight Toyota Motor climbed after its shareholders rejected a proposal to force Akio Toyoda, grandson of the automaker’s founder, to leave his post as chairman of the board.

AP

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