Stock market today: Asian shares start week with gains

NEW YORK –

Asian shares were mostly higher Monday after a widespread rally on Wall Street partly spurred by Apple’s report of better profit than expected.

Tokyo’s benchmark fell as markets reopened after several days of holidays, while markets in China advanced. U.S. futures edged lower and oil prices rose.

A report showed hiring accelerated across the economy by much more than expected last month. The government’s jobs report also showed workers won bigger pay raises than expected.

Such trends helped calm worries that a recession is looming, even as time grows short on reaching an agreement on the U.S. government debt ceiling, Stephen Innes of SPI Asset Management said in a commentary.

“But anxiety is building early this time and shifted into high gear last week after Secretary Yellen warned that a default could occur as soon as June 1,” he said.

Treasury Secretary Janet Yellen said Sunday that there are “no good options” for the United States to avoid an economic “calamity” if Congress fails to raise the nation’s borrowing limit of US$31.381 trillion in the coming weeks.

The government would lack the funds to pay its obligations, she said in an interview on ABC’s “This Week,”

“And it’s widely agreed that financial and economic chaos would ensue,” Yellen said.

She did not rule out U.S. President Joe Biden bypassing lawmakers and acting on his own to try to avert a first-ever federal default. If the government can’t borrow money to keep paying its bills for an extended period, there could be millions of job losses, businesses left bankrupt, crashes piling up across financial markets and lasting economic pain.

In Tokyo, the Nikkei 225 shed 0.6% to 28,981.63.

Reopening after a weeklong holiday, Hong Kong’s Hang Seng index added 0.7% to 20,195.37 and the Shanghai Composite index surged 1.7% to 3,392.26. South Korea’s KOSPI climbed 0.6% to 2,514.58, while the S&P/ASX 200 gained 0.7% in Sydney to 7,271.60.

Friday on Wall Street, the S&P 500 jumped 1.8% to 4,136.25, though it still turned in a modest loss for the week that was its worst in nearly two months.

The Dow Jones Industrial Average gained 1.7% to 33,674.38, and the Nasdaq rallied 2.2% to 12,235.41.

The strong employment data did revive worries that persisting high inflation may push the Federal Reserve to raise interest rates further, adding to pressure on an already slowing economy.

The Fed said Wednesday it wasn’t sure of its next move after raising its benchmark rate to a range of 5% to 5.25%, up from virtually zero early last year. Many traders expect the Fed to hold rates steady at its next meeting in June, which would be the first time that’s happened in more than a year.

High interest rates have already caused cracks in the U.S. banking system. Last week, regulators seized First Republic Bank, which became the third large U.S. bank failure to hit since March.

Investors have been hunting for the next possible weak link in the system and driving down stock prices for those seen at risk of a sudden exodus by customers. Several of the hardest hit recovered some of their steep losses Friday, with PacWest Bancorp. soaring 81.7%. It was still down 43.3% for the week. Western Alliance Bancorp. jumped 49.2% to trim its loss last week to 26.8%.

The U.S. banking industry’s turmoil has raised uncertainty. If banks pull back on their lending, that could act like rate increases and further stifle the economy.

Apple, the most valuable stock on Wall Street, gained 4.7% on Friday, helping to lift the S&P 500. The iPhone maker’s earnings and revenue fell but still exceeded analysts’ muted expectations.

In other trading Monday, benchmark U.S. crude oil picked up 42 cents to US$71.76 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.78 on Friday to $71.34 per barrel.

Brent crude, the international pricing standard, added 41 cents to $75.71 per barrel.

The dollar slipped to 134.75 Japanese yen from 134.88 yen. The euro rose to $1.1043 from $1.1023.