Stocks slip on Wall Street, oil drops amid economy worries

NEW YORK (AP) — Stocks edged lower in morning trading on Wall Street Monday as investors remain focused on the economy and prepare for several updates from retailers this week.

The S&P 500 fell 0.3% as of 10:15 a.m. Eastern. The Dow Jones Industrial Average fell 40 points, or 0.1%, to 33,720 and the Nasdaq fell 0.2%.

U.S. crude oil prices slumped 4.9% on worries about the global economy and weighed heavily on energy stocks. Exxon Mobil fell 3.8%.

China’s central bank cut a key interest rate after acknowledging more needs to be done to shore up its economy, the world’s second largest. It’s the latest warning for markets that are already on edge over record-high inflation and fears about recessions in the U.S. and elsewhere.

Treasury yields fell as a measure of manufacturing in New York state unexpectedly sank deeply into contraction. The yield on the 10-year Treasury, which banks use to set mortgage rates, fell to 2.77% from 2.83% late Friday.

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Financial stocks also fell broadly. Bank of America slipped 1.2%.

Moderna rose 4% after British regulators authorized an updated version of its COVID-19 vaccine.

The broader market has risen for four straight weeks on hopes that inflation is peaking and the Federal Reserve could ease up on its aggressive interest rate hikes. The central bank has been raising short-term interest rates to help slow economic growth and cool the hottest inflation in 40 years.

Wall Street is worried that the Fed could hit the brakes too hard and send the economy into a recession, and any signal that inflation could be peaking or retreating has helped ease some of those worries.

Investors are also keeping a close watch on how inflation is affecting businesses and consumers. Spending has slowed and the broader economy has already contracted for two straight quarters. Several big retailers will report their earnings this week and give investors more details on how some businesses are holding up.

Home Depot and Walmart will report their latest results on Tuesday and Target will report results on Wednesday.

Wall Street will also get a broader look at the health of the retail sector and consumer spending when the Commerce Department releases its July retail sales report on Wednesday. Economists surveyed by FactSet expect modest 0.2% growth from June, when sales rose 1%. That increase largely reflected higher prices, particularly for gas. But it also showed that Americans continue to spend, providing crucial support for the economy, though some economists suggest that’s mostly coming from higher-income households.

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