Stock market today: Wall Street drifts after a lukewarm report on the economy

NEW YORK (AP) U.S. stocks are drifting Monday to start what could be a quiet period after their best week since March.

The S&P 500 edged up 0.1% in morning trade. The Dow Jones Industrial Average was down 120 points, or 0.3%, at 33,652 as of 11:15 a.m. EST, while the Nasdaq composite was up 0.4%.

Indexes were listless after a report showed companies in the accommodation, construction and other U.S. services sectors rose in May for a fifth straight month, although less than economists expected. It’s the latest mixed reading on the US economy, which has started to slow under the weight of higher interest rates but has so far defied recession forecasts.

More stocks fell in the S&P 500 than rose, but a gain for market heavyweight Apple helped stabilize Wall Street. It rose 1.7% ahead of an event where it is expected to unveil a long-rumored helmet which will place its users between the virtual world and the real world,

In the oil market, crude gained after Saudi Arabia announced it would cut production hoping to drive up its price. A barrel of US crude rose 1.2% to $72.62, and a barrel of Brent, which is the international standard, climbed 0.6% to $76.60.

Both cost nearly $120 a year ago, and their prices have fallen on fears that a fuel-strapped global economy will consume less fuel.

Elsewhere, Wall Street was relatively calm. This coming week is light on earnings reports and leading economic data. That leaves few clues as to the dominant question looming over the market: which will come first, the economy falling into a recession or inflation falling enough for the Federal Reserve to cut interest rates?

That’s why a lot of attention is being given next week when the government releases the latest monthly inflation updates at the consumer and wholesale level. This is also the Fed’s next interest rate policy meeting. Traders are widely betting he will hold pat on rates, which would mark the first meeting where he hasn’t risen in over a year.

The bet on Wall Street, however, is that it could resume raising rates in July. The reason for such a pause would be to give the Fed time to assess its breakneck pace of rate hikes over the past year.

The purpose of high rates is to lower inflation by slowing down the whole economy and driving down the prices of stocks, bonds and other investments. With rates at their highest level since 2007, several high-profile U.S. bank failures since March have already shaken the market, while the manufacturing industry has been contracting for months.

The labor market, however, has managed to remain remarkably strong despite them. This helped American households to continue spending, which kept the economy from entering a recession. Data last week showed U.S. employers unexpectedly ramped up hiring in May, while wage increases for workers slowed to keep some pressure on inflation.

Despite all the uncertainty surrounding the economy, Wall Street remains on the verge of what is being called a bull market after weeks of gains.

The S&P 500 sits just below 4,290, and if it ends the day above 4,292.44, it will be more than 20% higher than it was in mid-October. That would mean Wall Street’s main measure of health has gone from its freezing bear market, when it fell more than 20% in nine months, to a mighty bull.

In the bond market, the 10-year Treasury yield fell to 3.67% from 3.70% on Friday evening.

The two-year Treasury note, which moves more on Fed expectations, fell to 4.47% from 4.51%. It had been higher earlier in the morning ahead of the weaker-than-expected U.S. Services Industries report.

On foreign stock markets, indices were mostly lower in Europe. Japan’s Nikkei 225 jumped 2.2%, while gains in other Asian markets were more modest.

AP Business Writers Matt Ott and Joe McDonald contributed.