US STOCKS-Wall Street modestly higher on mixed Fed messages, strong GDP data
All three indexes were modestly higher, paring initial gains after Richmond Fed President Thomas Barkin expressed skepticism that the central bank's tightening cycle is finished, keeping the option of another rate hike on the table in case inflation flares up again. Despite the indexes' languid movement over the last three sessions, November has been a banner month.
- United States
Wall Street edged higher on Wednesday as a robust upward GDP revision eased worries about a possible U.S. recession, while Federal Reserve officials' remarks left unresolved questions about the duration of the central bank's restrictive policy. All three indexes were modestly higher, paring initial gains after Richmond Fed President Thomas Barkin expressed skepticism that the central bank's tightening cycle is finished, keeping the option of another rate hike on the table in case inflation flares up again.
Despite the indexes' languid movement over the last three sessions, November has been a banner month. The S&P 500 remains on track to notch its biggest monthly percentage gain since July 2022. "Investors are going with the flow, and the flow is upward as the year comes to a close," said Sam Stovall, chief investment strategist of CFRA Research in New York. "Investors are waiting for another catalyst - a catalyst of confidence - to help shift the market into overdrive so it can advance in December."
In contrast to Barkin, Fed Governor Christopher Waller, widely considered a hawk, provided reassurance on Tuesday that the Fed has probably reached the end of its rate hike cycle. He hinted at the possibility of cutting rates in the near term to engineer a "soft landing" and avoid recession. "The Fed is going to remain data dependent. It doesn't want to, nor can it, give guidance on what it's going to do," Stovall added. "It doesn't want to tip its hand or give false hope. That's why they offer a wide variety of potential forward moves."
Indeed, on Wednesday Cleveland Fed President Loretta Mester reiterated the central bank's need to remain "nimble" in its response to economic data. Earlier in the session the Commerce Department upwardly revised its initial estimate on third-quarter gross domestic product, which underscored U.S. economic resilience but also appeared to give the Fed little reason to start cutting rates in the near future, as long as inflation remains well above its 2% target.
The Fed's Beige Book, which provides a region-by-region snapshot of the U.S. economy, was released at 2:00 p.m. EST, showing economic activity has slowed modestly under the central bank's restrictive monetary policy. At 2:12 p.m. ET, the Dow Jones Industrial Average rose 159.76 points, or 0.45%, to 35,576.74, the S&P 500 gained 13.04 points, or 0.29%, at 4,567.93 and the Nasdaq Composite added 24.38 points, or 0.17%, at 14,306.14.
Among the 11 major sectors of the S&P 500, financial and real estate were up the most, while communications services was the laggard. Interest rate sensitive momentum stocks, led by Microsoft Corp and Apple Inc were the heaviest weights on the S&P 500.
General Motors jumped 10.2% after the automaker announced a $10 billion share buyback and a 33% dividend boost. Ford Motor Co shares advanced 3.0%. CrowdStrike Holdings surged 10.1% following its consensus-beating fourth-quarter revenue forecast.
NetApp leaped 15.4% after the cloud-based data management platform increased its annual profit forecast. Advancing issues outnumbered decliners on the NYSE by a 3.07-to-1 ratio; on Nasdaq, a 2.03-to-1 ratio favored advancers.
The S&P 500 posted 30 new 52-week highs and one new low; the Nasdaq Composite recorded 80 new highs and 74 new lows.
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