Financial Markets                      05/13 15:30

   

   NEW YORK (AP) -- U.S. stock indexes drifted to a mixed finish Monday, 
hanging near their record heights.

   The S&P 500 edged down by 1.26, or less than 0.1%, to 5,221.42 after 
flipping between small gains and losses through the day. It remains within 0.6% 
of its record set at the end of March.

   The Dow Jones Industrial Average slipped 81.33 points, or 0.2%, to 
39,431.51, and the Nasdaq composite rose 47.37, or 0.3%, to 16,338.24.

   Biopharmaceutical company Incyte jumped 8.6% after saying it would buy back 
up to $2 billion of its stock. It's the latest big company to say it's 
returning cash to shareholders through such purchases, which boost the amount 
of earnings that each remaining share is entitled to.

   GameStop soared 74.4% in a swing reminiscent of its maniacal moves from 
three years ago, when hordes of smaller-pocketed investors sent the stock's 
price way above what many professional investors considered rational.

   One believer in particular, nicknamed Roaring Kitty, helped lead that 
charge, and a post on a social media account linked to him stirred more 
adrenaline. Within the first 70 minutes of trading on Monday, trading of 
GameStop's stock was temporarily halted nine times because its price was 
swinging so sharply.

   On the losing end was Fortrea Holdings, a provider of clinical trial 
management and other services for the life sciences industry. It fell 14.9% 
after reporting weaker results for the first three months of the year than 
analysts expected. It also gave a forecast for revenue over the full year that 
was below analysts' expectations.

   Stocks have broadly rallied this month following a rough April on revived 
hopes that inflation may ease enough to convince the Federal Reserve to cut its 
main interest rate later this year. A key test for those hopes will arrive 
Wednesday, when the U.S. government offers the latest monthly update on 
inflation that households are feeling across the country.

   Other reports this week include updates on inflation that wholesalers are 
seeing and sales at U.S. retailers. They could show whether fears are warranted 
about a worst-case scenario for the country, where stubbornly high inflation 
forms a devastating combination with a stagnating economy.

   Hopes have climbed that the economy can avoid what's called "stagflation" 
and hit the bull's eye where it cools enough to get inflation under control but 
stays sturdy enough to avoid a bad recession. Federal Reserve Chair Jerome 
Powell also gave financial markets comfort when he recently said the Fed 
remains closer to cutting rates than to raising them, even if inflation has 
remained hotter than forecast so far this year.

   Some critics say the Fed may have to delay rate cuts for longer than traders 
expect because of continued pressure on inflation. The goal for inflation that 
"the Fed seeks is a pipe dream," according to Barry Bannister, a managing 
director at Stifel.

   He says all the downward pressure on inflation that an economy usually gets 
from a recession has already been wrung out following the U.S. economic 
slowdown from 2022 into 2023, and he expects the next big move of 500 points 
for the S&P 500 to be downward.

   In the meantime, a stream of stronger-than-expected reports on U.S. 
corporate profits has helped support the market. Companies in the S&P 500 are 
on track to report growth of 5.4% for their earnings per share in the first 
three months of the year versus a year earlier, according to FactSet. That 
would be the best growth in nearly two years.

   Earnings season has nearly finished, and reports are already in for more 
than 90% of companies in the S&P 500. But this upcoming week includes Walmart 
and several other big names. They could offer more detail about how U.S. 
households are faring.

   Worries have been rising about cracks showing in spending by U.S. consumers, 
which has been one of the bedrocks keeping the economy out of a recession. 
Lower-income households appear to be under particularly heavy strain amid 
still-high inflation.

   In the bond market, Treasury yields eased a bit. The yield on the 10-year 
Treasury slipped to 4.48% from 4.50% late Friday.

   In stock markets abroad, Chinese indexes were mixed. The Biden 
administration is expected to announce this week that it will raise tariffs on 
electric vehicles, semiconductors, solar equipment, and medical supplies 
imported from China, according to people familiar with the plan. Tariffs on 
electric vehicles, in particular, could quadruple to 100%.

   Indexes slipped 0.2% in Shanghai and rose 0.8% in Hong Kong. Elsewhere in 
Asia and in Europe, most were modestly lower.

   ___

   AP Writer Zimo Zhong contributed.

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