Wall Street rises and pulls close to its record

By STAN CHOE, AP Business Writer

NEW YORK (AP) — U.S. stock indexes are rising Monday, and trading seems to be calmer following last week’s roller-coaster ride.

The S&P 500 climbed 0.7% in early trading and got back within 1% of its all-time high set earlier this month. The Dow Jones Industrial Average was up 208 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.9% higher.

Stocks of smaller and midsized banks drifted higher, recovering some of their losses after a couple raised alarm bells last week by warning about potentially bad loans they’ve made. That raised questions about whether the growing list of problems is just a collection of one-offs or a signal of something larger threatening the entire industry.

Zions Bancorp. rose 1% following its 5.1% drop last week. It will report its latest quarterly earnings after trading ends for the day, and scrutiny will be high after it said it’s charging off $50 million of loans where it found “apparent misrepresentations and contractual defaults” by the borrowers.

This will be a heavier week for corporate earnings reports generally. Big names delivering their latest results will include Coca-Cola on Tuesday, Tesla on Wednesday and Procter & Gamble on Friday.

The pressure is on companies to show that their profits are growing because they need to justify the big gains their stock prices have made. The S&P 500 is still near its all-time high, which was set earlier this month following a torrid 35% run from a low in April.

Delivering bigger profits is one of the easiest ways for companies to quiet criticism that stock prices have gone too high. The other is for stock prices to fall.

Corporate profit reports have also taken on more importance because they’re offering windows into the strength of the U.S. economy when the U.S. government’s shutdown has delayed many important economic updates.

That’s making the job of the Federal Reserve more difficult, as it tries to decide whether high inflation or the slowing job market is the bigger problem for the economy. Fed officials have indicated they’re likely to cut interest rates a few more times through next year in order to give the economy a boost. But that could be a mistake if inflation worsens because low interest rates can push prices even higher.

On Friday, the U.S. government will issue an update for inflation during September. The report was supposed to arrive earlier in month, and the Social Security Administration needs the numbers to calculate cost-of-living adjustments for beneficiaries.

But the government said, “No other releases will be rescheduled or produced until the resumption of regular government services.”

In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury eased to 3.99% from 4.02% late Friday.