NEW YORK: Wall Street stocks rose for a second straight session on Wednesday (Nov 23) following Federal Reserve (Fed) minutes that signalled a moderation in its aggressive policy to counter inflation.
At its latest meeting in early November, a majority of Fed policymakers found that a slower pace of interest rate increases would “likely soon be appropriate”, according to the minutes.
The release came on the heels of mostly solid economic data and helped equities recover from a mid-session swoon.
The Dow Jones Industrial Average rose 95.96 points, or 0.28%, to 34,194.06, the S&P 500 gained 23.68 points, or 0.59%, at 4,027.26 and the Nasdaq Composite added 110.91 points, or 0.99%, at 11,285.32.
Trading volume was thin ahead of the Thanksgiving holiday today (Nov 24), with the US stock market open for a half-session on Friday.
“What equity markets needed to see for the recent strength to continue was what we got from the minutes,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Since the Fed's last meeting on Nov 1-2, investors have been more optimistic that price pressures have started to ease, meaning smaller rate hikes could curtail inflation.
“What I think you’re seeing is renewed investor enthusiasm fuelled by those who see that beautiful light at the end of what has been a very dark tunnel. And there has been so much money on the sidelines that is rushing back into the markets and waiting to get back into the action,” said portfolio manager Moez Kassam of Anson Funds.
Earlier, reports showed surprisingly strong orders of big-ticket US manufactured goods in October, while new home sales defied expectations and rose during the same month.
Weekly jobless claims ticked higher, while a University of Michigan survey of consumer sentiment topped expectations.
Among individual companies, Deere & Co jumped 5% as it reported higher profits on a 37% surge in revenues to US$15.5 billion. Deere said industry conditions remained robust as it pointed to a “continuation of strong demand for farm and construction equipment”.
Software company Autodesk slumped 5.7% after it said free cash flow would be lower than expected in the near term because it sealed fewer multi-year contracts with up-front cash in a “challenging” macroeconomic environment.
Tesla Inc jumped 7.82% with Citigroup upgrading the electric-vehicle maker’s stock to “neutral” from a “sell” rating.
Nordstrom Inc fell 4.24% as the fashion retailer cut its profit forecast amid steep markdowns to attract inflation-wary customers. – AFP, Reuters
Source: The Sun Daily
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