US stocks open higher but are still headed for a weekly loss

Stocks are opening higher on Wall Street Friday, but the market is still on track to end this holiday-shortened week lower following two weeks of gains. The S&P 500 was up 0.5% in the early going, led by gains in banks and industrial companies. Major banks including JP Morgan Chase will kick off the latest round of quarterly earnings reports next week, and investors are expecting to see big gains compared with the same period a year ago, when pandemic restrictions shut down many parts of the economy. Bond yields moved higher but are still far below where they were in the spring.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

BANGKOK (AP) — World stocks were mixed Friday after Wall Street pulled back from recent record highs.

Benchmarks advanced in Paris, Frankfurt, London and Hong Kong but fell in Tokyo, Sydney and Shanghai. U.S. futures rose.

The yield on the 10-year Treasury note rose to 1.34%. On Thursday it fell to 1.30%, its lowest level since February. It recently was trading at 1.74%.

Traders have been shifting money into bonds in recent weeks, pulling down the benchmark yield, which is used to set rates on mortgages and many other kinds of loans.

Germany's DAX jumped 1% to 15,566.88 and the CAC 40 in Paris surged 1.8% to 6,510.77. In London, the FTSE 100 climbed 0.7% to 7,081.08.

The future for the Dow industrials was 0.5% higher, while that for the S&P 500 rose 0.3%.

Investors are gauging the potential impact from COVID-19 variants stymying a resurgence in commerce and travel, as governments in some countries reimpose precautions to counter fresh outbreaks.

In Asian trading, Tokyo's Nikkei 225 declined 0.6% to 27,940.42, while the Kospi in South Korea declined 1.1% to 3,217.95.

Sydney’s S&P/ASX 200 gave up 0.9% to 7,273.30, while the Shanghai Composite index edged less than 0.1% lower, to 3,524.09. Shares also fell in India and Taiwan, but they rose in Hong Kong, where the Hang Seng index gained 0.7% to 27,344.54.

Chinese consumer inflation eased to 1.1% over a year earlier in June, down from the previous month’s 1.3%, after global commodity prices eased, the government reported. Producer price inflation declined to 8.8% over a year earlier from May’s 9%.

“All told, concerns about price pressures in China look set to ease over the coming months, with inflation likely to settle at a level that is unlikely to trigger any shifts in monetary policy," Julian Evans-Pritchard and Sheana Yue of Capital Economics said in a commentary.

Also Friday, the Chinese central bank freed up more money for lending by reducing the amount of reserves commercial banks are required to hold. The central bank said the move, announced earlier by the Cabinet, would make an additional 1 trillion yuan ($160 billion) available for lending.

On Thursday, the S&P 500 fell 0.9% to 4,320.82, weighed down by a broad slide driven mainly in technology, financial, industrial and communication companies.

The Dow Jones Industrial Average lost 0.7% to 34,421.93. The Nasdaq composite snapped a three-day run of closing highs, sinking 0.7% to 14,559.78.

Smaller company stocks also fell. The Russell 2000 index slid 0.9%, to 2,231.68.

Longer-term bond yields tend to move along with investors’ expectations for inflation and economic growth. The sharp drop in long-term bond yields could also be attributed to investors quickly reversing bets that they would continue rising as the economy continued its sharp recovery.

Investors are increasingly jittery over potential moves by central banks, especially the U.S. Federal Reserve, to wind down lavish support for markets that cratered at the outset of the pandemic.

Investors will be turning their attention to corporate earnings starting next week, when major banks like JPMorgan Chase, Goldman Sachs and Bank of America report their results. Banks tend to be a proxy for the overall economy, so investors will be analyzing the reports closely and listening to what banks say about the status of lending and spending as the recovery continues.

Benchmark U.S. crude oil picked up 88 cents to $73.82 per barrel in electronic trading on the New York Mercantile Exchange. It gained 74 cents in the previous session, to $72.94 per barrel. Brent crude, the standard for international pricing, added 72 cents to $74.84 per barrel.

The U.S. dollar rose to 110.05 Japanese yen from 109.75 yen. The euro strengthened to $1.1851 from $1.1846.

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AP Business Writer Joe McDonald contributed from Beijing.