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bigdog

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Wall Street recovers some losses after falling 10% below its summertime high​

By STAN CHOE and DAMIAN J. TROISE

Wall Street clawed back some of its sharp recent losses Monday, ahead of a week that could se e more big swings in financial markets.

Investors are looking forward to key reports on consumer confidence and the U.S. job market. The Federal Reserve announces its next move on interest rates Wednesday.

The S&P 500 rose 49.45 points, or 1.2%, to close at 4,166.82. It was the first trading after the benchmark index dropped more than 10% below its high point for the year.

The Dow Jones Industrial Average rose 511.37, or 1.6%, to 32,928.96 points. The Nasdaq composite rose 146.47, or 1.2%, to 12,789.48.

Western Digital was the best performer in the tech sector after it reported better results for the latest quarter than analysts expected. The maker of data storage products also announced plans to split its company into two, one focused on traditional disk drives, the other on flash memory. Its stock jumped 7.3%.

McDonald’s reported stronger profit and revenue for the summer than analysts expected. Its stock rose 1.7% after it said it benefited from higher prices for its products in the United States and raised its dividend.

More than 3 out of 4 companies in the S&P 500 have been reporting stronger profit for the latest quarter than Wall Street expected, according to FactSet. With roughly half the reports in, S&P 500 companies appear on track to deliver profit growth for the first time in a year.

“It looks like its coming in as the market had hoped, that we’re past the worst of it,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

The results have also been good enough that earnings forecasts for the remainder of 2023 and 2024 seem to staying stable, he said.

Solid earnings are usually encouraging for the stock market, which tends to follow the trend of corporate profits over the long term. But Wall Street has been struggling recently due to a couple big worries. First is the mixed reaction to profit reports from some influential Big Tech companies. Their stock movements carry extra weight on the S&P 500 because of their size.

Apple will report its latest quarterly results on Thursday. Because it’s the most valuable stock on Wall Street, it is also the most influential stock on the S&P 500. Already, sharp drops for Alphabet and other Big Tech members following their profit reports have shaken the market this reporting season.

Big Tech soared much more than the rest of the market early this year, which helped to lift the S&P 500 but also meant big expectations for continued growth. Those expectations perhaps grew too large.

The second big factor dragging on the stock market since its high point for the year on July 31 has been a sharp run higher in Treasury yields. When bonds are paying higher yields, investors have less appetite for pricey stocks and other investments. They also make borrowing more expensive for everyone from huge corporations to home buyers, which puts the brakes on the economy.

The yield on the 10-year Treasury rose to 4.89% from 4.84% late Friday. It jumped from less than 3.50% during the spring to more than 5% earlier this month, its highest level since 2007. A remarkably resilient economy and other factors have the 10-year Treasury yield catching up to the main interest rate controlled by the Fed, which is above 5.25% and at its highest level since 2001.

The Fed has jacked up its federal funds rate in hopes of slowing the economy and stock prices enough to starve high inflation of its fuel. Its next meeting on interest rates will begin Tuesday, with an announcement coming Wednesday.

The widespread expectation is that it will leave the federal funds rate, which affects overnight lending by banks, alone. What will be more important is any hints about what the Fed will do next. Fed officials have been saying they may keep rates high for a long time to ensure inflation goes down, but they’ve also said the recent jump in longer-term Treasury yields could be acting like rate hikes on their own.

The central bank says it will make all its upcoming moves based on what incoming data about the economy and inflation say. That’s why this week could be a shaky one for markets, with many data points that could change officials’ minds.

On Tuesday, the government will release data on employment costs from July through September. Workers have been fighting for higher raises, but the Fed worries that too-high pay increases could give inflation more fuel. Also, The Conference Board will release its consumer confidence index for October.

On Wednesday will come the latest monthly update on the number of job openings across the country. One way the Fed could pull off the delicate balancing act of slowing the economy without creating a recession would be if the number of job openings cools without requiring waves of layoffs.

And then on Friday will come the jobs report for October, which is typically one of the most anticipated pieces of economic data every month.

Through it all will be other updates on the economy and borrowing by the U.S. government, as well as profit reports from roughly 150 companies in the S&P 500, including CVS Health, Pfizer and Starbucks.

Several oil-and-gas producers will also be reporting, including Marathon Petroleum. They’ve benefited from a run higher in crude prices since the summer. A barrel of U.S. crude jumped from less than $70 to more than $93 earlier this month.

But oil prices have been shaky since the start of the latest Israel-Hamas war. Traders are still uncertain about whether the fighting will spill into the politics around the region and affect production from Iran or other big suppliers.

A barrel of U.S. crude fell 3.8% Monday to $82.31. Brent crude, the international standard, sank 3.3% to $87.45 per barrel.

In stock markets abroad, indexes rose in Europe.


ASX 200 expected to rebound


The Australian share market is set to rebound on Tuesday following a very positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 29 points or 0.4% higher.

And Happy Halloween! While kids are getting ready for some trick or treating, it’s getting creepy on the Australian sharemarket as well.

Wall Street clawed back some of its sharp recent losses Monday, ahead of a week that could se e more big swings in financial markets.

Investors are looking forward to key reports on consumer confidence and the U.S. job market. The Federal Reserve announces its next move on interest rates Wednesday.

The S&P 500 rose 49.45 points, or 1.2%, to close at 4,166.82. It was the first trading after the benchmark index dropped more than 10% below its high point for the year.

The Dow Jones Industrial Average rose 511.37, or 1.6%, to 32,928.96 points. The Nasdaq composite rose 146.47, or 1.2%, to 12,789.48.


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bigdog

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Wall Street Rises to Soften the Blow of Its 3rd Straight Losing Month​

Wall Street closed higher to take a bit of the edge off another losing month

The S&P 500 gained 26.98, or 0.6%, to 4,193.80, a day after clawing back a bigger chunk of its loss for October. The Dow Jones Industrial Average added 123.91, or 0.4%, to 33,052.87, and the Nasdaq composite climbed 61.75, or 0.5%, to 12,851.24.

Most stocks ended up climbing after indexes swayed between small gains and losses through the morning, and more than 80% of the stocks in the S&P 500 strengthened.

Pinterest jumped 19% after reporting stronger profit for the latest quarter than analysts expected. It cited growth in users around the world, with Europe particularly strong.

Arista Networks was one of the strongest forces pushing the S&P 500 upward and climbed 14% after also reporting stronger profit for the summer than Wall Street had forecast. Analysts raised their estimates for future growth following the report on expectations the company will benefit from the artificial-intelligence boom.

The majority of big U.S. companies has reported stronger profit for the summer than expected, and Caterpillar also joined them. But the heavy machinery maker’s stock sank 6.7% after analysts focused on a slowdown in orders and growing inventories at dealers.

JetBlue Airways tumbled 10.5% after it reported a worse loss for the summer than expected. It said demand for travel is still strong during peak periods, but the industry has too many seats chasing after too few passengers during off-peak times. It also called the magnitude of air-traffic control and weather-related delays “staggering.”

VF Corp., the company behind Vans, Timberlands and other brands, dropped 14% after it reported weaker profit than expected. It also slashed its dividend 70% and withdrew its forecasts for revenue and profit this fiscal year.

Even though the big companies in the S&P 500 appear to be on track to report higher earnings for the first time in a year, the main index of Wall Street’s health still closed October with a loss of 2.2% for the month. That's its third straight monthly drop, the longest losing streak since the COVID-19 pandemic froze the global economy at the start of 2020.

A big reason for the weakness has been the swift rise in Treasury yields in the bond market. The 10-year Treasury yield, which is the centerpiece of the bond market, has jumped from less than 3.50% during the spring to more than 5% recently, touching its highest level since 2007.

Higher yields knock down prices for stocks and other investments, while slowing the overall economy and adding pressure on the entire financial system.

The 10-year Treasury yield ticked higher to 4.90% from 4.89% late Monday, and much of Wall Street is focused on what's coming Wednesday afternoon. That’s when the Federal Reserve will make its latest announcement on interest rates.

The Fed has already pulled its main overnight interest rate above 5.25% to its highest level since 2001. It's been saying it will make upcoming moves based on what data say about inflation and the job market, where the worry is that too-strong growth could give inflation more fuel.
Reports on the economy Tuesday came in mixed. One said that growth in wages and benefits for U.S. workers slowed during the summer, compared with year-earlier levels, but not by as much as economists expected.

The data “points to a disappointingly gradual moderation,” according to EY Chief Economist Gregory Daco, and wage growth remains above the Fed's comfort level.

Another report said that confidence among U.S. consumers weakened last month, but not by as much as economists expected.

Strong spending by U.S. households has been one of the main reasons the economy has avoided a long-predicted recession, but it could also be adding upward pressure on inflation. That's why the Fed is nervous about too strong growth in wages, as workers fight for higher pay amid high inflation.

The overwhelming expectation on Wall Street is still for the Fed to keep its overnight interest rate steady on Wednesday. The bigger question is how long it will keep that main rate high, before cutting it to offer financial markets some more oxygen.

In Tokyo, the Bank of Japan added more upward pressure on interest rates. It said it would allow yields on 10-year bonds to rise above 1%, calling that level “a reference point” instead of a more rigidly set cap. Even so, analysts said investors were likely braced for something even tougher from Japan, which is home to some of the easiest interest-rate policies around the world.

Japan's Nikkei 225 rose 0.5%, an outlier among losses across much of Asia amid worries about China's economic strength. Stocks indexes in Europe were modestly higher.


ASX 200 expected to charge higher

The Australian share market looks set for a good session on Wednesday following a decent night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.55% higher this morning.

Wall Street Rises to Soften the Blow of Its 3rd Straight Losing Month

Wall Street closed higher to take a bit of the edge off another losing month

The S&P 500 gained 26.98, or 0.6%, to 4,193.80, a day after clawing back a bigger chunk of its loss for October. The Dow Jones Industrial Average added 123.91, or 0.4%, to 33,052.87, and the Nasdaq composite climbed 61.75, or 0.5%, to 12,851.24.

Most stocks ended up climbing after indexes swayed between small gains and losses through the morning, and more than 80% of the stocks in the S&P 500 strengthened.


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bigdog

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Wall Street rallies on hopes the Federal Reserve’s rate hikes are done​

By STAN CHOE

U.S. stocks rallied Wednesday after the Federal Reserve indicated it may not need to pump the brakes any harder on Wall Street and the economy.

The S&P 500 rose 1.1% in its first trading coming off a third straight monthly loss. The Dow Jones Industrial Average gained 221 points, or 0.7%, and the Nasdaq composite jumped 1.6%.

Stocks built on gains as Treasury yields eased in the bond market after the Fed announced its decision to hold interest rates steady, as expected. The Fed has already yanked the overnight rate from nearly zero early last year to its highest level since 2001, above 5.25%.

Fed Chair Jerome Powell said in the afternoon that the central bank still isn’t sure its main interest rate is high enough to ensure high inflation will move down to its 2% target. That kept alive the possibility of more hikes by the Fed. He also said cuts to interest rates, which can act like steroids for financial markets, aren’t even on Fed officials’ minds at the moment.

But Powell acknowledged that a recent run higher in longer-term Treasury yields, and the tumble in stock prices that helped cause, are working on their own to slow the economy and could be starving high inflation of its fuel. If they can do that persistently, he indicated they could help the Fed whip inflation without requiring more rate hikes.

The jump in yields has already brought the average 30-year fixed mortgage rate to nearly 8%, for example, “and those higher costs are going to weigh on economic activity to the extent this tightening persists.”

And, he said, the Fed has time to assess the full effects of its past rate hikes after unleashing a furious barrage that began early last year.

“It takes time, we know that, and you can’t rush it,” Powell said. “Slowing down is giving us a better sense of how much more we need to do, if we need to do more.”

All together, Powell’s comments were “dovish enough” for financial markets, according to Yung-Yu Ma, chief investment officer for BMO Wealth Management. “Dovish” is what Wall Street calls an inclination to keep interest rates easier, and Ma continues to expect the Fed won’t hike rates any more.

Since the spring, longer-term Treasury yields have been rising rapidly and catching up with the Fed’s overnight rate. They’ve rallied as the U.S. economy has remained remarkably resilient and the central bank has warned it may keep its short-term rate high for a long time. Last month, the 10-year Treasury yield topped 5% to reach its highest level since 2007.

High yields knock down prices for stocks and other investments while making borrowing more expensive for nearly everyone. That slows the economy and puts pressure on the entire financial system.

The yield on the 10-year Treasury sank to 4.76% Wednesday from 4.92% late Tuesday. Much of the drop came after the Fed gave a nod to the notion that higher bond yields and shakiness in financial markets may be slowing the economy on their own.

But yields were already easing in the morning following several mixed reports on the economy.

One report from ADP suggested hiring accelerated last month by employers outside the government, though not by as much as economists expected. A more comprehensive jobs report from the U.S. government will arrive Friday.

A separate report said U.S. employers were advertising slightly more job openings at the end of September than economists expected. The Fed has been hoping for softening there, which could take pressure off inflation without requiring many layoffs.

A third report, meanwhile, said U.S. manufacturing contracted by more last month than economists had forecast. Manufacturing has been one of the U.S. economy’s hardest-hit areas.

In the background, big U.S. companies continue to report stronger profits for the summer than analysts expected, though that often hasn’t been enough to offset worries about higher yields.

DuPont fell 8.2% despite reporting stronger profit for the latest quarter than analysts had forecast. It gave some financial forecasts for 2023 that fell short of analysts’ expectations as it sees weakness in China and other challenges.

Estee Lauder also pointed to slower growth in China, among other factors, when it cut some of its financial forecasts for its fiscal year. Its stock tumbled 18.9%.

On the winning side of Wall Street, chipmaker Advanced Micro Devices rose 9.7% after it reported stronger profit and revenue for the latest quarter than forecast. Its revenue forecast for the end of 2023 disappointed some analysts, but it also pointed to growth in 2024 coming from the artificial-intelligence boom.

Big Tech stocks were also winners Wednesday, along with other high-growth stocks typically seen as the biggest beneficiaries of easier interest rates.

Gains of 2.4% for Microsoft, 1.9% for Apple and 3.8% for Nvidia were the three strongest forces pushing the S&P 500 higher.

All told, the S&P 500 rose 44.06 points to 4,237.86. The Dow gained 221.71 to 33,274.58, and the Nasdaq added 210.23 to 13,061.47.

Earlier in the day, stock indexes were mostly higher across Europe and Asia.


ASX 200 expected to rise again​


The Australian share market looks set to open the day higher on Thursday following a stellar night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 52 points or 0.75% higher this morning.

Wall Street rallies on hopes the Federal Reserve’s rate hikes are done

U.S. stocks rallied Wednesday after the Federal Reserve indicated it may not need to pump the brakes any harder on Wall Street and the economy.

The S&P 500 rose 1.1% in its first trading coming off a third straight monthly loss. The Dow Jones Industrial Average gained 221 points, or 0.7%, and the Nasdaq composite jumped 1.6%.

All told, the S&P 500 rose 44.06 points to 4,237.86. The Dow gained 221.71 to 33,274.58, and the Nasdaq added 210.23 to 13,061.47.


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bigdog

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Wall Street leaps toward its best week of 2023 on hopes for a halt to rate hikes​

By STAN CHOE

Wall Street roared higher again on Thursday with hopes the Federal Reserve may finally be done with its market-rattling hikes to interest rates.

The S&P 500 leaped 1.9% for its fourth straight winning day. It’s already up 4.9% this week and on pace for its best week in nearly a year.

The Dow Jones Industrial Average jumped 564 points, or 1.7%, and the Nasdaq composite climbed 1.8%.

Stocks around the world rallied after the Federal Reserve opted against raising its main interest rate late Wednesday. It’s already jacked up rates furiously since early last year in hopes of slowing the economy and hurting financial markets enough to starve high inflation of its fuel.

More importantly for financial markets, investors also took comments by the Fed’s chair to mean that recent jumps in longer-term Treasury yields were acting like rate-hike substitutes and could obviate the need for more increases by the Fed.

Longer-term Treasury yields fell as Fed Chair Jerome Powell spoke following the central bank’s decision, and they kept sinking Thursday. The yield on the 10-year Treasury dropped to 4.67% from 4.74% late Wednesday and from more than 5% last week, when it reached its highest level since 2007.

Lower yields provide oxygen across financial markets. They make it easier for businesses and households to get loans, encourage investors to pay higher prices for stocks and reduce the pressure on the entire financial system.

Of course, the recent drop in yields could end up shooting Wall Street in the foot. Powell said that a run higher in Treasury yields could displace the need for another rate hike if it is “persistent.” If the 10-year yield ends up falling too far, that could make the Federal Reserve more nervous and encourage more rate hikes.

“That was an interesting nuance, but I don’t think it overrides the majority of his comments that suggested it’s more likely than not that the Fed is done hiking,” said Lon Erickson, portfolio manager at Thornburg Investment Management.

Hopes for no more Fed hikes had financial markets around the world ebullient. Stock indexes jumped 1.8% in South Korea, 1.1% in Japan, 1.5% in Germany and 1.8% in France.

In London, the FTSE 100 climbed 1.4% after the Bank of England left its main interest alone, like the Fed.

Some reports on the U.S. economy also showed a bit of momentum that could help ease the pressure on high inflation. Fed officials are waiting to collect enough such data before they say they’re comfortable rates are high enough to sustainably drive inflation back down to their 2% target.

One preliminary report Thursday said U.S. businesses produced more stuff during the summer than the number of hours worked increased, indicating they got more efficient. Such gains in productivity could ease pressure on inflation while helping the economy to grow.

Productivity looks like it may be set for a continued uptrend over the next two years, aided in part by adoption of artificial-intelligence technology, according to economists at Deutsche Bank.

A separate report, meanwhile, said slightly more U.S. workers applied for unemployment benefits last week than expected. That’s bad news for those workers, but a cooler job market could take pressure off inflation.

Big U.S. companies, meanwhile, continue to report better profits for the summer than analysts expected.

Eli Lilly was one of the strongest forces pushing the S&P 500 upward after it reported stronger profit and revenue than analysts estimated. Its stock rose 4.7% after it said it benefited from soaring sales for its blockbuster diabetes treatment, Mounjaro, which is widely used for weight loss.

Starbucks jumped 9.5% after reporting stronger profit and revenue for the latest quarter than Wall Street forecast. It benefited from customers buying more and paying higher prices.

Also on Thursday, Cedar Fair and Six Flags said they’ll merge to create an expansive amusement park operator with operations spread across 17 U.S. states and three countries. Their stocks were mixed, but both remain up more than 7% this week after rumors of the deal spread.

On the losing end of Wall Street was Moderna, which sank 6.5% after reporting a much worse loss for the latest quarter than analysts expected.

All told, the S&P 500 rose 79.92 points to 4,317.78. The Dow jumped 564.50 to 33,838,08, and the Nasdaq gained 232.72 to 13,294.19.

More swings could be coming for Wall Street. On Friday morning, the latest monthly update on the U.S. jobs market will arrive. Economists expect it to show a slowdown in hiring for October.

A remarkably resilient job market has helped to keep the economy out of a long-predicted recession, but the fear at the Fed is too much strength there could push upward on inflation.

ASX 200 expected to jump

The Australian share market looks set to end the week on a very positive note following another strong session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 85 points or 1.2% higher this morning.

Wall Street leaps toward its best week of 2023 on hopes for a halt to rate hikes

Wall Street roared higher again on Thursday with hopes the Federal Reserve may finally be done with its market-rattling hikes to interest rates.

The S&P 500 leaped 1.9% for its fourth straight winning day. It’s already up 4.9% this week and on pace for its best week in nearly a year.

The Dow Jones Industrial Average jumped 564 points, or 1.7%, and the Nasdaq composite climbed 1.8%.

All told, the S&P 500 rose 79.92 points to 4,317.78. The Dow jumped 564.50 to 33,838,08, and the Nasdaq gained 232.72 to 13,294.19


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bigdog

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Wall Street closes its best week of the year with even more gains​

By STAN CHOE

Wall Street steamrolled even higher Friday as it closed out its best week in nearly a year.

The S&P 500 climbed 40.56 points, or 0.9%, to 4,358.34 and rose every day of the week. The Dow Jones Industrial Average gained 222.24, or 0.7%, to 34,061.32, and the Nasdaq composite jumped 184.09, or 1.4%, to 13,478.28.

Stocks surged through the week on rising hopes the Federal Reserve is finally done with its market-crunching hikes to interest rates, meant to get inflation under control. A report on Friday underscored that pressure is easing on inflation after it showed employers hired fewer workers last month than economists expected.

It’s a stunning turnaround from just a week ago, when Wall Street was reeling after the S&P 500 had fallen 10% below its high point for the year. That sent Wall Street’s main index into what investors call a “correction.”

Since then strong profit reports helped drive some stocks to towering gains. Generac, a maker of backup generators, soared nearly 28% for its best week since its stock began trading in 2010. At Expedia Group, another stronger-than-forecast report sent its stock nearly 22% higher for its best week since the market was surging out of the coronavirus crash in early 2020.

But it was interest rates, yields and inflation that were at the center of all the wild movements for financial markets around the world.

Before this week, stocks had been struggling under the weight of rapidly rising Treasury yields. Those yields were in turn catching up to the Fed’s main interest rate, which is above 5.25% and at its highest level since 2001.

Higher rates and yields slow the economy, hurt prices for investments and raise the risk of something breaking within the financial system, such as the three high-profile U.S. bank failures that rattled financial markets during the spring.

“It was really fear that the Fed was going to go too far,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

The Fed put such pressure on the economy intentionally, hoping to starve inflation of its fuel. It wants the job market to cool, particularly pay raises going to workers. The Fed fears too-strong pay gains could create a vicious cycle that keeps inflation high.

Analysts said Friday’s jobs report offered encouraging signals for the Fed, with average hourly earnings rising less in October from September than expected, though it doesn’t mean the job is done.

Treasury yields in the bond market tumbled immediately after the jobs report, releasing more of the pressure that had built up on Wall Street. The yield on the 10-year Treasury eased to 4.52% from 4.67% late Thursday and from more than 5% last week, when it hit its highest level since 2007.

Of course, that sharp fall in yields could also end up hurting investors in the long run. Fed Chair Jerome Powell said this week that the central bank may not need to hike rates any more if the recent rise in yields stays “persistent.” Such high yields could slow the economy and push down on inflation by themselves, without requiring the Fed to hike rates again.

A swift regression in Treasury yields could make the Fed more nervous and encourage it to consider raising rates again. The 10-year yield in just a week eliminated its rise from all of October.

Plus, a slowing job market raises pressure on economic growth, and worries still exist on Wall Street about a possible recession even though the economy is strong at the moment.

Still, a slowing U.S. job market is exactly what investors wanted to see because it could convince the Fed to halt its barrage of hikes to interest rates.

Traders are moving up expectations for when the first cut to interest rates by the Fed could happen, potentially by the summer, according to data from CME Group. Such cuts can act like steroids for financial markets.

For investors around the world, the “Fed matters more than other central banks,” and weak U.S. data is “the only game-changer for markets,” foreign-exchange strategists at Bank of America wrote in a BofA Global Research report.

A separate report on Friday said growth in U.S. services industries, such as finance and construction, was weaker last month than economists expected. The report from the Institute for Supply Management also suggested a slight easing in prices.

Excitement about a potentially easier Fed was more than enough to offset a fall for Apple, which is Wall Street’s most influential stock.

The most valuable U.S. stock fell 0.5% despite reporting stronger profit for the latest quarter than analysts expected. Analysts said investors were likely disappointed with Apple’s forecast for revenue for the last three months of 2023.

On the winning side of Wall Street was Cardinal Health. It rose 6.9% after a better-than-expected profit report

Stocks indexes were mixed in Europe and higher across most of Asia.


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ASX 200 expected to rise again


The Australian share market looks set to open the week higher following a strong finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open 14 points or 0.2% higher on Monday.

Wall Street steamrolled even higher Friday as it closed out its best week in nearly a year.

The S&P 500 climbed 40.56 points, or 0.9%, to 4,358.34 and rose every day of the week. The Dow Jones Industrial Average gained 222.24, or 0.7%, to 34,061.32, and the Nasdaq composite jumped 184.09, or 1.4%, to 13,478.28.
 

bigdog

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New York is now on daylight savings and one hour later


Wall Street drifts to a mixed and quiet finish following last week’s big swings​

By STAN CHOE

U.S. stocks drifted to a mixed finish Monday as Wall Street’s wild recent moves calmed a bit.

The S&P 500 added 7.64 points, or 0.2%, to 4,365.98, even though the majority of stocks within it and across Wall Street weakened. The index was coming off its best week of the year, which itself came on the heels of several months of sharp losses.

The Dow Jones Industrial Average rose 34.54, or 0.1%, to 34,095.86, and the Nasdaq composite gained 40.50, or 0.3%, to 13,518.78.

The flashpoint for the stock market’s movements in both directions has been what the bond market is doing, and it regressed Monday following its own extreme moves.

The yield on the 10-year Treasury rose to 4.64%. That’s up from 4.57% late Friday, but it’s still below the perch above 5% that it reached last month, its highest level since 2007. High yields hurt prices for stocks and other investments, while slowing the economy and raising the pressure on the financial system.

This upcoming week looks to have fewer big events on the calendar that could shake financial markets. It’s a slower week for corporate profit reports, with roughly 50 companies in the S&P 500 set to say how much they earned during the summer. That’s down from about 150 a week before.

Constellation Energy rose 6.5% after it reported better results for the latest quarter than analysts expected.

Berkshire Hathaway ‘s Class B stock fell 1.5% after it reported a loss for its latest quarter over the weekend. Much of the loss was because of drops in the value of some of Berkshire Hathaway’s investments on paper. Looking only at its operating profit, Warren Buffett’s company beat analysts’ expectations.

Even more companies than usual in the S&P 500 have been beating Wall Street’s profit forecasts this reporting season. The index looks to be on pace to deliver its first growth in earnings per share in a year.

“Don’t worry,” strategists at Bank of America led by Savita Subramanian wrote in a BofA Global Research report. “Earnings were fine.”

Trading of WeWork’s stock was halted amid speculation about its financial health. It’s plunged 98.5% this year to less than $1.

The events with perhaps the most potential to shake markets this upcoming week are speeches on the schedule by officials from the Federal Reserve.

Last week, the Federal Reserve held its main interest rate steady for a second straight time, leaving it at its highest level since 2001. It’s jacked up its federal funds rate from nearly zero in hopes of getting high inflation under control.

Perhaps more importantly for markets, Fed Chair Jerome Powell also hinted that a swift rise in Treasury yields since the summer — and the tumult that created in financial markets — could act as substitutes for further hikes to rates if they remain “persistent.” That’s because they could be slowing the economy and putting downward pressure on the economy by themselves.

A report from the Federal Reserve Monday said that significant numbers of loan officers at banks reported tightening their standards to lend money. Many banks cited a less favorable or more uncertain outlook on the economy. A slowdown in lending could tap the brakes further on the economy.

Powell’s comments last week ignited hopes that the Fed may be done hiking interest rates. Traders also increased bets the central bank could begin cutting rates by this upcoming summer. Cuts to rates can act like steroids for financial markets.

Over the last couple years, Wall Street has built up hopes several times that cuts to interest rates may be on the horizon, only for them to get dashed by Fed officials pledging to keep interest rates high for a long time to ensure inflation goes down.

At the end of this week will come a preliminary report showing how much inflation U.S. households are preparing for. Such inflation expectations have been key for the Fed, which fears too-high expectations could trigger a vicious cycle that keeps inflation high.

In the oil market, crude prices gained after Saudi Arabia and Russia reiterated their commitment to maintaining oil supply cuts of more than 1 million barrels per day until the end of the year.

A barrel of benchmark U.S. crude rose 31 cents to settle at $80.82. Brent crude, the international standard, rose 29 cents to $85.18 per barrel.

In stock markets abroad, indexes were mostly lower in Europe after jumping across much of Asia.

South Korean stocks leaped 5.7% after the government restored a ban to prevent investors from betting on stock prices will fall by borrowing shares and selling them.

Japan’s Nikkei 225 index gained 2.4%, and Hong Kong’s Hang Seng jumped 1.7%


ASX 200 expected to fall

The Australian share market is set to give back Monday's gains following a subdued start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 11 points or 0.2% lower.
Wall Street drifts to a mixed and quiet finish following last week’s big swings

U.S. stocks drifted to a mixed finish Monday as Wall Street’s wild recent moves calmed a bit.

The S&P 500 added 7.64 points, or 0.2%, to 4,365.98, even though the majority of stocks within it and across Wall Street weakened. The index was coming off its best week of the year, which itself came on the heels of several months of sharp losses.

The Dow Jones Industrial Average rose 34.54, or 0.1%, to 34,095.86, and the Nasdaq composite gained 40.50, or 0.3%, to 13,518.78.

The flashpoint for the stock market’s movements in both directions has been what the bond market is doing, and it regressed Monday following its own extreme moves.


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Wall Street ticks up as falling oil prices and Treasury yields ease the pressure​

By STAN CHOE

U.S. stocks ticked higher Tuesday as Wall Street continues to absorb the big swings that have shaken financial markets recently.

The S&P 500 rose 12.40 points, or 0.3%, to 4,378.38, as gains for some Big Tech stocks helped offset losses for the majority of stocks in the index. It’s the second straight quiet day for the index after months of heavy losses swiveled sharply to a rally last week, its best of the year.

The Dow Jones Industrial Average rose 56.74, or 0.2%, to 34,152.60, and the Nasdaq composite gained 121.08, or 0.9%, to 13,639.86.

TripAdvisor jumped 11% after reporting better results for the summer than analysts expected, while Emerson Electric sank 7.4% after falling short of expectations.

The majority of big companies has been topping estimates so far this earnings reporting season, but another factor has been much more influential in driving the stock market’s big swings since the summer: the bond market.

Treasury yields there eased Tuesday, with the 10-year yield falling to 4.56% from 4.66% late Monday.

Earlier in the summer, a swift rise in Treasury yields sent the stock market reeling. Yields were catching up to the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001 in hopes of getting high inflation under control. High rates and yields hurt stock prices, slow the economy and raise the pressure on the entire financial system.

But yields eased sharply last week after investors took comments from the Federal Reserve to indicate it may finally be done with its hikes to interest rates. Inflation has been moderating since peaking in the summer of 2022, and the recent jump in Treasury yields may be acting like a substitute for more rate hikes.

Of course, Fed Chair Jerome Powell also cautioned last week that more hikes may still come if the rise in Treasury yields does not stay “persistent.”

Another Fed official, Gov. Michelle Bowman, said Tuesday she still expects the need to raise the federal funds rate further, but she voted to hold steady at the last meeting in part because the outlook for the economy is so uncertain. She also said it’s still too early to know how the summer’s run higher in Treasury yields will affect the economy and inflation.

More speeches by Fed officials this week could prove to be the biggest movers of financial markets, with relatively few high-impact economic reports on the calendar. Depending on what Fed officials say, that could portend a quieter week for financial markets, which have had quick triggers.

“When narratives shift, the market response is often fast and ferocious, with the initial reaction providing the best returns,” said Jason Draho, head of asset allocation Americas at UBS Global Wealth Management.

Elsewhere on Wall Street, homebuilder D.R. Horton gained 2.9% after reporting better results for the latest quarter than analysts expected.

Uber Technologies rose 3.7% after swinging between gains and losses through the morning. It reported a bigger profit than expected, but its revenue growth was not as strong as forecast.

Shares of WeWork were not trading after the office-sharing company filed for Chapter 11 bankruptcy protection. It’s a stunning fall for the company that had promised to upend the way people went to work around the world. After earlier being valued at $47 billion, its stock plunged 98.5% this year.

In the oil market, crude prices tumbled to continue their own sharp recent swings.

A barrel of benchmark U.S. crude dropped $3.45 to settle at $77.37 and is back to where it was in July, before the latest Israel-Hamas war raised worries about potential disruptions to supplies.

Brent crude, the international standard, lost $3.57, to $81.61.

Oil prices fell as worries continue about how much fuel the world’s second-largest economy will burn. China reported its exports fell 6.4% in October from a year earlier, the sixth straight monthly decline, while imports rose 3%, the first such increase in over a year. The trade surplus fell to $56.5 billion.

Stocks fell 1.6% in Hong Kong and by less than 0.1% in Shanghai, joining losses across much of the rest of Asia. Drops were more modest for stock indexes in Europe.


ASX 200 expected to edge slightly lower


The Australian share market looks set for a mildly lower session on Wednesday following a decent night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 1 point lower this morning

U.S. stocks ticked higher Tuesday as Wall Street continues to absorb the big swings that have shaken financial markets recently.

The S&P 500 rose 12.40 points, or 0.3%, to 4,378.38, as gains for some Big Tech stocks helped offset losses for the majority of stocks in the index. It’s the second straight quiet day for the index after months of heavy losses swiveled sharply to a rally last week, its best of the year.

The Dow Jones Industrial Average rose 56.74, or 0.2%, to 34,152.60, and the Nasdaq composite gained 121.08, or 0.9%, to 13,639.86


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Wall Street inches up to extend its winning streak to 8 days as oil falls again​

By STAN CHOE

U.S. stocks were largely stuck in place Wednesday as Wall Street continues to recalibrate following its sharp recent swings.

The S&P 500 edged up by 4.40 points, or 0.1%, to 4,382.78 for a third straight day of quiet, mixed trading. Its movements have become much calmer after the index screamed to its best week of the year last week, which itself came after months of painful losses.

Though the gain was slight, it was enough to extend the index’s winning streak to eight days. That ties its longest such winning streak since a nine-day run 19 years ago.

The Dow Jones Industrial Average slipped 40.33 points, or 0.1%, to 34,112.27, and the Nasdaq composite rose 10.56, or 0.1%, to 13,650.41.

Eli Lilly was one of the strongest forces pushing upward on the market. It rose 3.2% after U.S. regulators said its popular diabetes treatment, Mounjaro, can be sold as a weight-loss drug and tap into a market with massive potential.

American Airlines, Delta Air Lines and United Airlines were also toward the front of the market, and each rose more than 2% as oil prices continued to drop and ease the pressure on fuel costs.

Warner Brothers Discovery tumbled 19% after reporting a worse loss for the latest quarter than analysts expected. It also lost more streaming subscribers than forecast.

The reporting season for summertime profits is winding down, and the majority of companies has been topping Wall Street’s forecasts. That’s usually the case, and it’s offered some support for the stock market. But the big driver for stock price movements since the summer has been what yields are doing in the bond market.

The 10-year Treasury yield fell to 4.51% from 4.57% late Tuesday, helping to impart calm across financial markets.

A swift rise in the 10-year yield that began in the summer earlier knocked the S&P 500 down by more than 10% from its peak for the year. The 10-year yield briefly topped 5% to reach its highest level since 2007, as it caught up with the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001.

The Fed has jacked up rates in hopes of slowing the economy and hurting investment prices enough to put downward pressure on inflation and get it back to its 2% goal.

Last week, though, investors took comments from Fed Chair Jerome Powell to indicate the central bank’s hikes to interest rates may be done. He said the summer’s jump in Treasury yields could substitute for further hikes to rates if they remain persistent. That triggered a sharp easing in Treasury yields, which in turn helped stocks to rally.

Now, investors are trying to handicap what may come next. A wide range of outcomes is still possible for the U.S. economy, with the 10-year yield potentially easing as low as 3% if it were to fall into a painful recession, according to Bank of America strategists led by Bruno Braizinha. At the same time, they said the 10-year yield could rise back above 5% if the economy remains resilient.

A sharp drop in oil prices recently could take some pressure off inflation, which in turn could help the Fed feel more confident about holding rates steady instead of raising them further.

The price for a barrel of U.S. crude oil is back to where it was in July, and it dropped another $2.04 to settle at $75.33. Brent crude, the international standard, fell $2.07 to $79.54.

Oil prices have been tumbling since topping $90 a little more than a month ago. The latest Israel-Hamas war raised concerns about potential disruptions to supplies, which made prices volatile for a while. But worries about demand are still high given faltering economies around the world, particularly in China.

Stock indexes fell 0.2% in Shanghai and 0.6% in Hong Kong, joining modest losses across much of the rest of Asia. Stocks were higher in Europe.

Elsewhere on Wall Street, Axon Enterprise rose 6.1% after the maker of Tasers, body cameras and other equipment reported stronger profit for the latest quarter than analysts forecast.

Ralph Lauren rose 3.2% after reporting stronger profit for the latest quarter than analysts forecast.

eBay sank 2% after its forecast for revenue for the last three months of 2023 fell short of analysts’ expectations.

Rivian Automotive swung from an early gain to a loss of 2.4% after the electric vehicle company raised its forecast for how many vehicles it will produce this year and reported weaker profit than expected for the latest quarter.


ASX 200 expected to rise again

The Australian share market looks set to open the day higher on Thursday following a reasonably positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 28 points or 0.4% higher this morning.

U.S. stocks were largely stuck in place Wednesday as Wall Street continues to recalibrate following its sharp recent swings.

The S&P 500 edged up by 4.40 points, or 0.1%, to 4,382.78 for a third straight day of quiet, mixed trading. Its movements have become much calmer after the index screamed to its best week of the year last week, which itself came after months of painful losses.

Though the gain was slight, it was enough to extend the index’s winning streak to eight days. That ties its longest such winning streak since a nine-day run 19 years ago.

The Dow Jones Industrial Average slipped 40.33 points, or 0.1%, to 34,112.27, and the Nasdaq composite rose 10.56, or 0.1%, to 13,650.41.


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Wall Street falls after the bond market cranks up the pressure again​

By STAN CHOE
Updated 8:25 AM GMT+11, November 10, 2023
Stocks fell Thursday to break one of Wall Street’s longest winning streaks in two decades after the pressure cranked higher from the bond market.

The S&P 500 sank 35.43 points, or 0.8%, to 4,347.35. The Dow Jones Industrial Average dropped 220.33, or 0.6%, to 33,891.94, and the Nasdaq composite lost 128.97, or 0.9%, to 13,521.45.

Stocks had been higher earlier in the day, and the S&P 500 was on track for a ninth straight gain, which would have been its longest winning streak in 19 years. But the stock market quickly sagged under the weight of rising yields in the bond market.

Treasury yields rose in the morning after a report suggested the U.S. job market remains remarkably solid. They climbed further when the U.S. government announced the results of a sale of $24 billion in Treasury bonds. And then they spurted higher after Federal Reserve Chair Jerome Powell said the Fed “will not hesitate” to raise interest rates further if it feels high inflation is not fully under control.

The 10-year Treasury yield, which is the centerpiece of the bond market, rose to 4.63% from 4.50% late Wednesday.

High rates and yields have been the main driver for the stock market for months because they hurt prices for investments, slow the economy and raise the pressure on the financial system.

A swift rise in the 10-year yield that began in the summer earlier knocked the S&P 500 down by 10% from its peak for the year. The yield briefly topped 5% to reach its highest level since 2007, as it caught up with the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001.

Last week, though, investors took comments from the Fed’s Powell to indicate is hikes to interest rates may be done. He said the summer’s jumps in Treasury yields could substitute for further hikes to rates if they remain persistent. That triggered a sharp easing in Treasury yields, which in turn helped stocks to rally.

But Powell reiterated Thursday that no decision has been made yet.

Even though some recent data reports have been encouraging, he made pains to say, “Inflation has given us a few headfakes.” He said the Fed will continue to move carefully, trying not to be “misled by a few good months of data,” while aware of the risks of hiking rates too far and driving the economy into a painful recession.

Powell’s comments cooled some of the enthusiasm that had built on Wall Street as traders moved up their forecasts for when the Federal Reserve could begin cutting rates. Many are betting on rate cuts to begin by summer, according to data from CME Group.

Some economists have already been trimming their forecasts for how deeply the Fed may ultimately cut, saying the central bank will likely keep rates higher than they were before COVID.

At Goldman Sachs, for example, economist David Mericle says the Fed could begin cutting rates during the last three months of 2024. But he sees the Fed cutting its federal funds rate only to a range of 3.50% to 3.75% from its current range of 5.25% to 5.50%.

Earlier, Mericle thought the Fed could bring it down as low as 3% to 3.25%, but he said the U.S. government’s big, persistent deficits and other factors could keep rates higher.

The worries about rates overshadowed some more profit reports from big U.S. companies for the summer that came in better than expected.

The Walt Disney Co. rose 6.9% after saying it added more Disney+ streaming subscribers than Wall Street had forecast, while also increasing its target for annual cost savings.

Tapestry climbed 3% for another one of the bigger gains in the S&P 500 after the maker of high-end shoes and handbags beat Wall Street’s profit forecast

On the opposite end was Becton Dickinson, which sank 9.3%. The maker of medical equipment reported profit for the summer that matched Wall Street’s expectations, but its financial forecasts for its upcoming fiscal year fell short of some analysts’ estimates.

Topgolf Callaway Brands was another weight on the market and sank 16.9% despite beating analysts’ expectations for profit during the summer. It cut its forecasts for full-year revenue and profit, in part because of weakening trends at its Topgolf entertainment venues outside of newly opened ones.

In the oil market, crude prices regained a bit of their big losses from earlier in the week.

A barrel of U.S. crude added 41 cents to settle at $75.74, and Brent crude, the international standard, gained 47 cents to $80.01 per barrel. Both, though, remain roughly 6% lower for the week so far amid worries about supplies outstripping demand.

In stock markets abroad, indexes were mostly higher across Europe and Asia.


ASX 200 expected to edge lower


The Australian share market looks set to edge lower this morning following a poor session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 5 points lower this morning.

Stocks fell Thursday to break one of Wall Street’s longest winning streaks in two decades after the pressure cranked higher from the bond market.

The S&P 500 sank 35.43 points, or 0.8%, to 4,347.35. The Dow Jones Industrial Average dropped 220.33, or 0.6%, to 33,891.94, and the Nasdaq composite lost 128.97, or 0.9%, to 13,521.45.

Stocks had been higher earlier in the day, and the S&P 500 was on track for a ninth straight gain, which would have been its longest winning streak in 19 years. But the stock market quickly sagged under the weight of rising yields in the bond market.


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Wall Street rallies and adds to its strong gains in November​

By STAN CHOE

Wall Street rose sharply Friday, keeping November on track to be one of its best months of the year, as companies continued to turn in better profits for the summer than expected.

The S&P 500 leaped 1.6% amid a widespread rally. The Dow Jones Industrial Average gained 391 points, or 1.2%, and the Nasdaq composite was 2% higher.

Stocks climbed as financial markets recovered from a slump the prior day, triggered in part by worries that the Federal Reserve may hike its main interest rate further to get inflation under control. Bets diminished among traders on Friday that the Fed will increase rates at its next meeting, even though a report in the morning indicated expectations for inflation among U.S. households is on the rise.

This earnings reporting season is also turning out much better than analysts expected, and it’s likely to show the first growth in earnings per share for S&P 500 companies in a year, according to FactSet. But the focus is swinging toward what companies will do later this year and beyond as interest rates remain high and the U.S. economy is expected to slow.

“We think earnings growth can accelerate in 2024,” said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. That’s one reason he’s forecasting the S&P 500 can continue to rise modestly over the next year.

Hologic jumped 7.3% for the biggest gain in the S&P 500 after the maker of diagnostics and other products focused on women’s health reported better profit for the latest quarter than expected.

Doximity was another winner, up 16.2% after it likewise reported stronger profit than forecast.

Even some of Wall Street’s biggest losers for the day also reported better profit than expected.

Illumina tumbled 8% after the maker of DNA-sequencing and other technology products cut its financial forecasts for the full year and said “the environment remains challenging.” It reported better results for the third quarter than expected.

Wynn Resorts also topped analysts’ expectations for the latest quarter, but its stock fell 5.7% amid concerns about some weaker trends underneath the surface in Macao.

All told, the S&P 500 rose 67.89 points to 4,415.24. The Dow gained 391.16 to 34,283.10, and the Nasdaq jumped 276.66 to 13,798.11.

Big Tech stocks were the strongest forces pushing upward on the S&P 500, including a 2.3% gain for Apple and 2.5% rise for Microsoft.

They tend to be some of the biggest beneficiaries when interest rates and bond yields ease, and Treasury yields were holding relatively steady following their leap the prior day.

The yield on the 10-year Treasury dipped to 4.61% from 4.64% late Thursday.

The yield fell even though a report in the morning suggested U.S. consumers are girding for higher inflation. Their expectations for inflation over the long run rose to the highest since 2011, according to a preliminary reportfrom the University of Michigan.

The Federal Reserve has said it wants to keep such expectations low because they otherwise could lead to a vicious cycle that keeps inflation high. The release of the University of Michigan report initially caused Treasury yields to pare their drops, which caused stock indexes to wobble. But the stock market quickly shrugged off the data and continued to rise.

Fed Chair Jerome Powell earlier this month cautioned against overrating the report’s importance, when asked how key the University of Michigan reading was in the Fed’s thinking.

“We look at a range of things,” he said. “I think the UM thing got blown out of proportion a little bit, it was actually a preliminary estimate that got revised away, and I said it was preliminary in it, but that didn’t get picked up.”

By late Friday, traders were betting on only a 9.1% chance that the Fed will raise its main interest rate at its next meeting in December, according to data from CME Group. That’s down from 14.6% a day earlier.

High interest rates and yields hurt prices for stocks and other investments, while slowing the economy broadly and raising the pressure on the financial system in hopes of getting inflation under control.

On Thursday, a jump in yields had knocked stocks lower to break an eight-day winning streak for the S&P 500, one of its longest in the last two decades. That came after the Fed’s Powell dashed some of the hopes building among traders that the Federal Reserve may finally be done hiking its main interest rate.

The sharp moves in financial markets recently have been “all about bonds,” say Michael Hartnett and other strategists at Bank of America.

After the 10-year Treasury yield popped above 5% last month to its highest level since 2007, in part on expectations for big borrowing by the U.S. government, the S&P 500 briefly dropped more than 10% below its high point for the year. Since then, the market has rebounded as “year-end greed” set in and the 10-year yield regressed, the strategists wrote in a BofA Global Research report.

In the oil market, crude prices regained some more of their sharp losses from earlier in the week. A barrel of benchmark U.S. crude for delivery in December rose $1.43 to settle at $77.17. Brent crude, the international standard, added $1.42 to $81.43 per barrel. Both still lost close to 4% for the week on worries about supplies outstripping demand.

A financial services business of China’s biggest bank, ICBC, said it was hit this week by a ransomware attack that reportedly disrupted trading in the U.S. Treasury market.

New York-based Industrial and Commercial Bank of China Financial Services handles trades and other services for financial institutions. It said it had isolated affected systems and that trades had cleared by Thursday. It was unclear how much of an impact the attack had on Treasury market trading.


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ASX 200 expected to rebound


The Australian share market looks set to open the week higher following a strong finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% higher on Monday.

Wall Street rose sharply Friday, keeping November on track to be one of its best months of the year, as companies continued to turn in better profits for the summer than expected.

The S&P 500 leaped 1.6% amid a widespread rally. The Dow Jones Industrial Average gained 391 points, or 1.2%, and the Nasdaq composite was 2% higher.

Stocks climbed as financial markets recovered from a slump the prior day, triggered in part by worries that the Federal Reserve may hike its main interest rate further to get inflation under control. Bets diminished among traders on Friday that the Fed will increase rates at its next meeting, even though a report in the morning indicated expectations for inflation among U.S. households is on the rise.

All told, the S&P 500 rose 67.89 points to 4,415.24. The Dow gained 391.16 to 34,283.10, and the Nasdaq jumped 276.66 to 13,798.11.


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Wall Street drifts ahead of reports on inflation and big retailers’ profits​

By STAN CHOE

Wall Street drifted through a mixed Monday to open a week that could bring more action to financial markets, with several big reports on the calendar.

The S&P 500 slipped 3.69 points, or 0.1%, to 4,411.55. The Dow Jones Industrial Average gained 54.77, or 0.2%, to 34,337.87, and the Nasdaq composite fell 30.36, or 0.2%, to 13,767.74.

The market was coming off a week with relatively few reports to give hints on Wall Street’s central questions: When will the Federal Reserve halt its hikes to interest rates and begin cutting them, and can the economy stay as resilient as it has? But this week will offer more, including the latest monthly update on inflation and earnings reports from some of the nation’s biggest retailers.

The profit reporting season for the summer is winding down, and the majority of companies have again topped analysts’ expectations. Henry Schein became the latest to beat Wall Street’s forecasts, and the provider of health care products rose 5.4%.

Tyson Foods’ results also topped expectations for adjusted earnings, but its stock fell 2.8% after it warned of potentially challenging times ahead. The meat company said it could see zero growth in its overall revenue this upcoming fiscal year.

Later this week, Target, TJX and Walmart will report their own results, and more attention may also be on what they say about upcoming trends than about the summer.

The economy has remained strong, even though the Federal Reserve has hiked its main interest rate to its highest level since 2001 in hopes of stamping out high inflation. But worries remain about whether it can stay solid as the full effects of rate hikes make their way through the system.

That’s why so much attention will be on Tuesday’s inflation report. The hope is that inflation will continue to cool from its peak in the summer of 2022, when it topped 9%, and convince the Federal Reserve that no more hikes to rates are necessary. That in turn could speed up the timeline for potential cuts to interest rates, which can juice financial markets.

Economists expect the report to show that consumers paid prices that were 3.3% higher in October than a year earlier, down from September’s inflation rate of 3.7%.

With inflation generally cooling, Federal Reserve Chair Jerome Powell gave some hope recently that a recent rise in longer-term Treasury yields could act as substitutes for further rate hikes, which could mean the Fed may be done with them. But Powell said last week the Fed would not hesitate to hike rates again if needed.

In the bond market, the yield on the 10-year Treasury dipped to 4.62% from 4.63% late Friday. It’s come down over the last month on hopes the Fed may be done with its rate hikes, but it’s still well above where it’s been for years.

High rates and yields weigh on all kinds of investments, and they tend to hit technology and other high-growth companies particularly hard. Some Big Tech stocks were among the heaviest weights on the S&P 500, including a 0.9% dip for Apple and 0.8% slip for Microsoft.

Those two, along with five other Big Tech stocks that make up what’s called the “Magnificent Seven,” have been disproportionately responsible for most of this year’s gains for the S&P 500.

“Such weak price breadth is not indicative of a healthy bull market, in our view, and accurately reflects the challenging earnings dynamics occurring under the surface of the market,” according to strategists at Morgan Stanley led by Michael Wilson.

He sees the challenge continuing into early 2024 before a sustainable profit recovery could take hold.

More shakiness could be ahead if investors focus on a couple challenges facing the market, according to Chris Larkin, managing director at E-Trade from Morgan Stanley

The credit-rating agency Moody’s said late Friday that it could eventually downgrade the top-tier “AAA” rating it has for U.S. government debt given the cost of rising interest rates and political polarization in Congress.

The latter has been playing out in another showdown that could result in a U.S. government shutdown.

While a shutdown or the cutting of the U.S. government’s credit rating may not trigger big moves by themselves, general worries about Washington’s big spending deficits and Congress’ inability to work together have been behind some of the recent run higher in Treasury yields.

In stock markets abroad, Chinese indexes rose after Alibaba Group Holding and JD.com reported a pickup in sales for this year’s Singles’ Day shopping festival. Like other Chinese companies, they’re grappling with a stop-start recovery in the world’s second-largest economy.

On Wednesday, China’s leader, Xi Jinping, is set to meet with President Joe Biden on the sidelines of a Pacific Rim summit in California. It will be the first face-to-face encounter in a year between the leaders of the world’s two biggest economies.

Stock indexes were mostly higher across the rest of Asia and Europe.


ASX 200 expected to rebound

The Australian share market is expected to rebound strongly on Tuesday despite a mixed Wall Street lead. According to the latest SPI futures, the ASX 200 is poised to open the day 68 points or 0.9% higher.

Wall Street drifted through a mixed Monday to open a week that could bring more action to financial markets, with several big reports on the calendar.

The S&P 500 slipped 3.69 points, or 0.1%, to 4,411.55. The Dow Jones Industrial Average gained 54.77, or 0.2%, to 34,337.87, and the Nasdaq composite fell 30.36, or 0.2%, to 13,767.74.


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Wall Street soars as cooling inflation raises hopes for an end to rate hikes​

By STAN CHOE

NEW YORK (AP) — Relief washed over Wall Street Tuesday, and stocks leaped to one of their best days of the year following a surprisingly encouraging report on inflation.

The S&P 500 jumped 1.9% for its best day since April and hit a two-month high. The Dow Jones Industrial Average rallied 489 points, or 1.4%, while the Nasdaq composite charged 2.4% higher.

The highly anticipated report showed not only that overall inflation slowed last month, but so did a key underlying figure that economists see as a better indicator of future trends. The slowdown bolstered bets on Wall Street that inflation is cooling enough for the Federal Reserve to finally be done with its market-crunching hikes to interest rates.

Such hopes lifted all kinds of investments, and more than 90% of the stocks in the S&P 500 climbed in a widespread rally.

Technology and other high-growth stocks tend to get some of the biggest boosts from easier rates, and a 2.3% rise for Amazon and 2.1% lift for Nvidia were two of the strongest forces pushing the S&P 500 upward.

Stocks of smaller companies also got a huge boost, with the Russell 2000 index of small stocks surging 5.4% for its best day in a year. Smaller companies are often seen as more dependent on borrowing cash to grow, which can make them more vulnerable to higher interest rates.

The inflation data helped to buoy Wall Street’s hopes that the Fed may actually pull off the balancing act of slowing the economy and hurting investment prices just enough to grind down inflation, but not so much as to cause a painful recession. That is still not a certainty, though.

The Fed has yanked its main interest rate to its highest level since 2001, up from virtually zero early last year, in hopes of getting inflation back down to 2%. The moves have already sent shockwaves through the financial system, with stocks still down from their peak in early 2022 and several high-profile U.S. bank failures earlier this year shaking confidence.

Even if it doesn’t hike rates any more, the Fed is likely to keep its main rate high for a while.

Still, the inflation report was immensely encouraging for Wall Street. After the report’s release, Treasury yields in the bond market tumbled immediately as traders flooded into bets that the Fed won’t hike rates again.

Investors also pushed up the expected timetable for the Fed’s first cut to rates, which can act like steroids for financial markets and provide oxygen across the financial system.

“Ain’t no reason to believe the last inflation mile will be the most difficult,” said EY Chief Economist Gregory Daco. “Slower consumer demand, reduced housing rents, lower profit margins, easing wage growth and restrictive monetary policy represent the ideal disinflationary combo heading into 2024.”

The yield on the 10-year Treasury tumbled to 4.44% from 4.64% late Monday, which is a significant move for the bond market. Just a few weeks ago, the 10-year yield was above 5% and at its highest level since 2007.

Traders now see zero chance of a rate increase at the Fed’s next meeting next month, down from a 14.5% probability a day before, according to data from CME Group.

The prospect of no more rate hikes reverberated across all kinds of financial markets.

The value of the U.S. dollar fell against many other currencies, further slowing its strong run since the summer, while the price of gold rose $16.30 to settle at $1,966.50 per ounce. Higher rates tend to hurt gold because the metal looks less attractive as an investment when bonds are paying higher yields and gold continues to pay nothing.

On Wall Street, real-estate stocks and others beaten down particularly hard by higher rates soared to some of the market’s biggest gains.

Alexandria Real Estate Equities jumped 11.7%, for example. It owns mega campuses catering to life sciences companies in hubs around the country.

Real-estate investment trusts send out most of their earnings to investors as dividends, which means they typically compete with bonds for the same kind of investors. When rates are rising and bonds are paying higher yields, those investors often turn away from REITs, utility companies and other high-dividend stocks.

Bank stocks were also strong on hopes that a halt to rate hikes will mean less pressure on the financial system. Zions Bancorp jumped 8.1%, and Comerica rose 7.8%. Both their stock prices fell sharply earlier this year following the collapses of Silicon Valley Bank and other banks a tier or two below in size of the industry’s behemoths.

Elsewhere on Wall Street, Home Depot rallied 5.4% after reporting stronger profit for the latest quarter than analysts expected.

Target, Walmart and other big retailers will report their latest results later this week. They’re at the tail end of an earnings reporting season that has been better than analysts expected. Companies in the S&P 500 are on track to deliver their first overall growth in earnings in a year, according to FactSet.

All told, the S&P 500 rose 84.15 points to 4,495.70. The Dow gained 489.83 to 34,827.70, and the Nasdaq climbed 326.64 to 14,094.38.

In stock markets abroad, indexes were mostly higher across Europe and Asia.


ASX 200 expected to jump

The Australian share market looks set for another positive session on Wednesday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 91 points or 1.4% higher this morning.

Relief washed over Wall Street Tuesday, and stocks leaped to one of their best days of the year following a surprisingly encouraging report on inflation.

The S&P 500 jumped 1.9% for its best day since April and hit a two-month high. The Dow Jones Industrial Average rallied 489 points, or 1.4%, while the Nasdaq composite charged 2.4% higher.

All told, the S&P 500 rose 84.15 points to 4,495.70. The Dow gained 489.83 to 34,827.70, and the Nasdaq climbed 326.64 to 14,094.38.


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Yesterday was an all green trading day


Wall Street tacks a bit more onto its big rally from the day before​

By STAN CHOE

Wall Street is ticking higher Wednesday and adding a bit more to its big rally from a day before.

The S&P 500 was up 0.3% in afternoon trading. The Dow Jones Industrial Average was up 176 points, or 0.5%, as of 2:50 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Target was helping to lead the market with a 17.6% jump after it reported much stronger profit for the latest quarter than analysts expected. But another big retailer, TJX, fell 2.6% after the parent company of T.J. Maxx and Marshalls gave a profit forecast for the upcoming holiday shopping season that fell short of analysts’ estimates.

Wall Street’s overall moves are more tentative coming off its best day since April, when an encouraging report on inflation boosted investors’ hopes that the Federal Reserve may finally be done with its market-crunching hikes to interest rates. That in turn bolstered hopes the Fed can actually pull off the tricky balancing act of getting high inflation under control without causing a painful recession.

Treasury yields rose, retracing a bit of the steep drops from the day before that had helped stocks to rally so much. The yield on the 10-year Treasury climbed to 4.53% from 4.45% late Tuesday, adding some pressure onto financial markets.

Another report on inflation Wednesday came in lower than expected. Prices at the wholesale level were 1.3% higher in October than a year earlier, and they surprisingly fell from September’s levels. That breathed more life into hopes that inflation is indeed cooling enough for the Fed to halt its barrage of rate hikes.

The Fed has already yanked its main interest rate to its highest level since 2001, up from virtually zero early last year. It’s hoping to slow the economy and hurt investment prices just enough to drive high inflation lower, without overdoing it.

But a separate report on sales at U.S. retailers released Wednesday morning “complicates the picture,” according to Chris Larkin, managing director at E-Trade from Morgan Stanley.

Sales fell 0.1% in October from September, holding up better than the 0.3% drop forecast by economists. Stronger-than-expected sales at U.S. retailers is an indicator of a healthier economy, which is important given worries still exist about a possible recession. But they could also feed into upward pressure on inflation, which could get the Fed nervous about interest rates.

The yield on the two-year Treasury, which tends to track expectations for the Fed, and other yields climbed immediately after the release of the retail sales data and other economic reports. The two-year yield rose to 4.91% from 4.84% late Tuesday.

The bond market has been at the center of Wall Street’s sharp swings because higher rates and yields hurt prices for all kinds of investments.

That’s had investors anxiously waiting for when the Fed could stop its torrent of hikes to rates and, perhaps more importantly, begin cutting them. Such cuts can act like steroids for markets, goosing investment prices and providing more oxygen for the financial system.

Traders on Wall Street have built expectations that the Fed could begin cutting rates as soon as the summer following the recently encouraging data on inflation. That’s despite officials at the Fed saying that they will likely keep interest rates high for a while in order to ensure the battle is definitively won against inflation.

Strategists at Goldman Sachs are warning the market’s expectations for rate cuts by major central banks around the world are “too large and too early,” while adding that even if rates are heading lower, they will not be low like they were before.

The strategists led by Praveen Korapaty are looking for U.S. economic growth to slow from its strong pace now, but not to fall in a recession, while inflation eases back towards the Fed’s target.

In stock markets abroad, indexes rallied sharply in Asia after momentum from Wall Street’s big rally Wednesday headed westward. Hong Kong’s Hang Seng surged 3.9%, Japan’s Nikkei 225 jumped 2.5% and South Korea’s Kospi rose 2.2%.

Reports showed that Japan’s economy contracted during the summer. In the world’s second-largest economy, meanwhile, a report showed the Chinese economy is holding up even as some indicators have slowed.

Stocks were also higher in Europe, but by more modest amounts than in Asia.

ASX 200 expected to edge lower

The Australian share market looks set to open the day lower on Thursday despite another positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 4 points lower this morning.

Wall Street is ticking higher Wednesday and adding a bit more to its big rally from a day before.

The S&P 500 was up 0.3% in afternoon trading. The Dow Jones Industrial Average was up 176 points, or 0.5%, as of 2:50 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.


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Wall Street drifts amid worries about profits and hopes for a just-right economy​

By STAN CHOE

Stocks drifted to a mixed finish Thursday as Wall Street’s momentum slowed following its hot first half of November.

The S&P 500 edged up by 5.36 points, or 0.1%, to 4,508.24 and remains comfortably on track for its third straight winning week. The Dow Jones Industrial Average slipped 45.74, or 0.1%, to 34,945.47, and the Nasdaq composite gained 9.84, or 0.1%, to 14,113.67.

Walmart weighed on the market with an 8.1% drop after it warned that shoppers began pulling back on spending late last month. The nation’s largest retailer also gave a forecast for upcoming holiday profit that was weaker than analysts expected, despite topping forecasts for results in its latest quarter.

Cisco Systems tumbled 9.8% even though it also reported stronger results for the latest quarter than analysts estimated. The company saw a slowdown of new product orders last quarter, and it gave forecasts for earnings this upcoming quarter and fiscal year that were weaker than analysts expected.

Stocks in the oil-and-gas industry were particularly weak after the price of crude tumbled sharply to its lowest since July. Marathon Petroleum dropped 3.5%, and Halliburton fell 3.3%.

November nevertheless remains on track to be the S&P 500’s best month in a year on rising hopes for a “Goldilocks” economy that’s just right for markets.

Investors are betting inflation is cooling enough to convince the Federal Reserve to halt its hikes to interest rates following its fusillade since last year. That in turn has pushed expectations up for when the Fed could begin cutting rates, which can act like steroids for financial markets, in the summer.

Several more reports on Thursday indicated a slowing economy. While the weaker-than-expected data are of course a signal the economy may be losing some of its strong momentum, for investors, they just as importantly may be showing that upward pressures on inflation is easing.

One report said that slightly more workers applied for unemployment benefits last week. The number is still low relative to history, but a softening in the job market could prevent the too-strong raises in workers’ pay that the Fed fears could trigger a vicious cycle keeping inflation high.

Separate reports said that manufacturing in the mid-Atlantic region is unexpectedly weakening, while U.S. industrial production weakened more than expected in October.

The Fed has been trying to shepherd the economy along a tightrope, to slow just enough to stamp out high inflation without falling into a recession. Thursday’s weaker-than-expected reports strengthened investors’ hopes that the Fed can pull it off and go easier on interest rates. That triggered an immediate drop in Treasury yields.

The yield on the 10-year Treasury fell to 4.44% from 4.54% late Wednesday. Just last month, it was above 5% at its highest level since 2007 and raising worries on Wall Street as it undercut prices for stocks and other investments.

Lower yields offer more breathing space for financial markets, and 45% of the stocks in the S&P 500 rose.

Macy’s jumped 5.7% after delivering a surprising profit for the latest quarter. Sonos leaped 17.1% on speculation that it may start selling headphones in the second half of its fiscal year, which could be a meaningful new business.

Some economists and analysts are warning that investors have become overzealous in predicting when the Fed could begin cutting rates. Even if the Fed is done hiking its main interest rate, officials at the central bank have said they’ll likely keep it high for a while to ensure inflation is truly stamped out. The federal funds rate is above 5.25% and at its highest level since 2001.

A slowing economy would also mean softer growth in demand for fuel, and worries are already high about swelling inventories for crude oil. That sent crude oil prices skidding sharply.

A barrel of benchmark U.S. crude for delivery in December tumbled $3.76 to settle at $72.90. Brent crude, the international standard, also dropped $3.76, to $77.42 per barrel.

Strategists at Barclays expect global economic growth to slow in 2024 before recovering in 2025, as inflation falls further.

That’s still a “benign bottom for a business cycle,” Ajay Rajadhyaksha and other analysts wrote in a report, and they expect the U.S. unemployment rate to top out at 4.3%, well below where it has in past recessions.

In stock markets abroad, Tokyo’s Nikkei 225 slipped 0.3% after Japan reported that its exports rose a meager 1.6% in October, down from September’s growth.

Indexes were mixed across the rest of Asia and Europe.


ASX 200 expected to fall again


The Australian share market looks set to end the week in the red following a relatively ordinary session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 1 point lower this morning.

Stocks drifted to a mixed finish Thursday as Wall Street’s momentum slowed following its hot first half of November.

The S&P 500 edged up by 5.36 points, or 0.1%, to 4,508.24 and remains comfortably on track for its third straight winning week. The Dow Jones Industrial Average slipped 45.74, or 0.1%, to 34,945.47, and the Nasdaq composite gained 9.84, or 0.1%, to 14,113.67.


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Wall Street edges higher as it nears end of 3rd straight winning week​

By STAN CHOE

Wall Street is edging higher in quiet trading on Friday as its scorching November rolls toward the close of a third straight winning week.

The S&P 500 rose 0.2% in afternoon trading and is near its highest level in three months. The Dow Jones Industrial Average was up 24 points, or 0.1%, as of 2:06 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Several retailers were making strong gains after reporting better results for the latest quarter than analysts expected. Gap surged 28.6% after reporting much higher profit than Wall Street had forecast, more than doubling its gain for the year so far. Ross Stores climbed 8.3% after reporting stronger profit and revenue than expected.

On the losing end was BJ’s Wholesale Club, which fell 4.1% despite also reporting better results than expected. Analysts pointed to an underlying sales figure that strips out the boost from store openings, which fell short of expectations.

Retailers are closing out what’s been a better-than-hoped earnings reporting season for the summer. Companies in the S&P 500 are on track to report their first overall growth in a year, according to FactSet.

But the much more impactful factor driving stocks higher this week was hope that inflation has cooled enough for the Federal Reserve to finally be done with its market-crunching hikes to interest rates.

The Fed has already raised its main interest rate to the highest level since 2001, trying to slow the economy and dent financial markets just enough to get inflation under control without causing a painful recession.

A report on Tuesday showing inflation at the consumer level cooled more than expected last month ignited hopes that the Fed could pull off the tricky balancing act. Subsequent readings fanned the hopes higher after suggesting inflation and the overall economy may be slowing.

Now traders are trying to bet on when the Fed could actually begin cutting interest rates, something that can juice prices for investments and provide oxygen across the financial system. The Fed has said that it plans to keep rates high for a while to ensure that the battle against inflation is definitively won, but traders are thinking cuts could begin early in the summer of 2024.

One source of potential worry about inflation has been receding in recent weeks. Oil prices have plunged amid worries about a mismatch between too much crude supply and too little demand.

A barrel of U.S. crude rose 3.9% Friday to $75.75 to recover some of its sharp losses from earlier in the week. But it’s still well below its perch above $93 in late September.

Brent crude, the international standard, rose 4.1% to $80.59 per barrel Friday.

In the bond market, the yield on the 10-year Treasury remained at 4.44% from late Thursday. Just a few weeks ago, it was above 5%, at its highest level since 2007 and undercutting prices for stocks and other investments.

Of course, too steep a drop in Treasury yields and too big a rally in stock prices could end up conspiring to work against Wall Street. Chair Jerome Powell said after the Fed’s last meeting on interest rates that it may not hike any more if the summer’s jump in Treasury yields and fall in stock prices remained “persistent.” That’s because they could act almost like substitutes for more rate increases.

Since then, yields have dropped sharply, and November is on track to be the best month for the S&P 500 in a year. It all means financial conditions have unwound about half of the tightening seen in October, according to economists at Deutsche Bank.

Still, recent reports on inflation and the economy have been so encouraging that “the Fed can afford to be less concerned with this easing,” according to Justin Weidner and the other economists.

In stock markets abroad, Hong Kong’s Hang Seng tumbled 2.1%. Shares of Chinese e-commerce giant Alibaba plunged following its cancellation of a plan to spin off its cloud computing unit. The company cited uncertainties due to U.S. chip restrictions.

Stock indexes were mixed elsewhere in Asia while rising more strongly in Europe.


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ASX 200 expected to rebound


The Australian share market looks set to open the week higher following a relatively positive finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.4% higher on Monday.

Wall Street is edging higher in quiet trading on Friday as its scorching November rolls toward the close of a third straight winning week.

The S&P 500 rose 0.2% in afternoon trading and is near its highest level in three months. The Dow Jones Industrial Average was up 24 points, or 0.1%, as of 2:06 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Several retailers were making strong gains after reporting better results for the latest quarter than analysts expected. Gap surged 28.6% after reporting much higher profit than Wall Street had forecast, more than doubling its gain for the year so far. Ross Stores climbed 8.3% after reporting stronger profit and revenue than expected.


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Thanksgiving Day NYSE holidayThursday, November 23



Wall Street gains ground at the start of a holiday-shortened week​

By STAN CHOE

Wall Street is rising Monday to begin a holiday-shortened week, pushing to its best level in more than three months.

The S&P 500 was 0.8% higher in late trading, coming off its third straight winning week. The Dow Jones Industrial Average was up 242 points, or 0.7%, with an hour remaining in trading, and the Nasdaq composite was 1.2% higher.

Microsoft was the strongest force pushing the market higher, and it rose 2.4% after it said it’s bringing on Sam Altman for a new venture following his sudden dismissal as CEO of OpenAI, the maker of ChatGPT. Microsoft said it will also continue its partnership with OpenAI, as fervor around artificial-intelligence technology and the huge profits it’s expected to create continue to dominate Wall Street.

Stocks broadly drifted higher through the day, before they took a decisive swing upward in the afternoon when yields fell in the bond market following an auction of Treasurys. Easing Treasury yields over recent weeks have been the main reason for a strong rally for stocks.

This upcoming week is relatively light on reports that could sway the hopes on Wall Street that have underpinned the drop in Treasury yields.

Wall Street is getting more convinced that inflation is cooling enough for the Federal Reserve to finally be done with its market-crunching hikes to interest rates. Not only that, traders are moving up their expectations for when the Fed could actually begin cutting interest rates.

Despite Fed officials saying they may keep rates high for a while to ensure high inflation is definitively beaten, traders are thinking the first cut to rates could happen by early summer or maybe even by March. Such a move could act like steroids for financial markets and offer oxygen across the financial system.

The Thanksgiving holiday means the U.S. government will release its weekly update on jobless claims on Wednesday instead of the usual Thursday. Other than that, the release of the minutes from the Fed’s latest policy meeting on Tuesday and preliminary reports on U.S. business activity on Friday are among the highlights.

That could make Nvidia’s upcoming profit report on Tuesday the week’s highest-profile event.

Nvidia carries huge sway on the S&P 500 and other indexes because it’s swelled to become the fifth-most valuable U.S. stock. Much of that rise has been because of excitement around AI, and Nvidia’s report could offer clues on how much all the talk about AI is translating into actual sales.

Analysts expect Nvidia to say its earnings per more than quintupled from a year earlier and that its revenue soared to nearly $16.2 billion from less than $6 billion.

Nvidia has been one of the seven Big Tech stocks that have accounted for a disproportionate amount of the S&P 500’s gains this year. The “Magnificent Seven” stocks have returned 73% so far this year, versus just 6% for the other 493 companies, according to Goldman Sachs strategists.

While they’re likely to perform better given expectations for stronger growth, the strategists led by David Kostin warn “the risk/reward profile is not especially compelling given elevated expectations.”

Nvidia rose 2.3% before its report. Best Buy, Deere, HP and Lowe’s will also be giving their latest quarterly updates this week.

On the losing end of Wall Street Monday was Kohl’s. The retailer fell 1.2% after it said that Dave Alves left as its president and chief operating officer, less than nine months after naming him to the post.

In the bond market, Treasury yields were easing. The yield on the 10-year Treasury, which is the centerpiece of the bond market, fell to 4.41% from 4.44% late Friday.

The two-year yield, which moves more on expectations for Fed action, slipped to 4.89% from 4.90% late Friday.

In stock markets abroad, Japan’s Nikkei 225 index touched a 33-year high before falling later in trading to a dip of 0.6%.

Stock indexes were stronger elsewhere in Asia and mixed in Europe.

Crude oil prices rose to recover some of their sharp losses over the last couple months. A barrel of U.S. crude oil for delivery in December rose $1.71 to settle at $77.60, but it’s still well below its perch above $93 in late September.

Brent crude, the international standard, rose $1.71 to $82.32 per barrel.


ASX 200 expected to rise again


The Australian share market is expected to rise again on Tuesday following a positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 19 points or 0.25% higher.

Wall Street is rising Monday to begin a holiday-shortened week, pushing to its best level in more than three months.

The S&P 500 was 0.8% higher in late trading, coming off its third straight winning week. The Dow Jones Industrial Average was up 242 points, or 0.7%, with an hour remaining in trading, and the Nasdaq composite was 1.2% higher.


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Wall Street drifts lower in a rare stumble following its big rally​

By STAN CHOE

Wall Street’s rally ran out of momentum Tuesday, and stocks drifted lower a day after hitting their highest level since the start of August.

The S&P 500 slipped 9.19 points, or 0.2%, to 4,538.19 for just its third loss in the last 17 days. The Dow Jones Industrial Average dropped 62.75, or 0.2%, to 35,088.29, and the Nasdaq composite dipped 84.55, or 0.6%, to 14,199.98.

Retailers were mixed after several reported their earnings for the latest quarter and, more importantly, their forecasts for the upcoming holiday shopping season.

Lowe’s sank 3.1% despite reporting better profit for the latest quarter than analysts expected. Its revenue fell short of Wall Street’s estimates, and it also cut its forecasts for revenue and profit over the full year. Sales for do-it-yourself projects have been lower than expected at the home improvement retailer

Best Buy dipped 0.7% after likewise beating analysts’ expectations for profit in the latest quarter but falling short on revenue. Its CEO, Corie Barry, said demand from customers has been “more uneven and difficult to predict.”

Best Buy cut its forecast for revenue for the full year, along with some other financial measures.

On the winning side of Wall Street was Dick’s Sporting Goods, which rose 2.2%. It delivered stronger profit and revenue for the third quarter than analysts expected, as customers both bought more at each transaction and made more total purchases. The sporting goods retailer raised its forecasts for full-year results.

Retailers are closing out what’s been a mostly better-than-hoped earnings reporting season for the summer. Companies in the S&P 500 are on track to deliver their first year-over-year growth in earnings per share in a year, according to FactSet.

But it’s been interest rates that have been the much bigger factor moving the stock market recently. Stocks have jumped on rising hopes that inflation has cooled enough to make the Federal Reserve’s next move on interest rates a cut rather than a hike.

It would be a stark turnaround after the Fed rushed to yank its main interest rate to its highest level since 2001 from virtually zero early last year. The central bank is trying to slow the economy and hurt investment prices just enough with high interest rates to smother inflation without overdoing it and causing a painful recession.

Recent economic reports suggesting a slowdown in both inflation and the economic activity that could create more inflation have pushed traders to move up expectations for when the Fed could begin cutting rates. They see a nearly 30% chance of it happening in March and a 58% probability that it happens by May, according to data from CME Group.

Such expectations have caused Treasury yields in the bond market to tumble.

The yield on the 10-year Treasury edged down to 4.41% from 4.42% late Monday. Just a few weeks ago, it was above 5%, at its highest level since 2007 and undercutting prices for stocks and other investments.

Of course, too strong a drop in Treasury yields and too big a rally in stock prices could give officials at the Federal Reserve pause. Such movements could give the economy more juice, which would put upward pressure on inflation, and could push the Fed toward hiking again.

But even the Fed officials who are generally most inclined to keep rates high have recently softened their tone some, according to economists at Deutsche Bank.

“Overall, these Fed communications reinforced our view that the likelihood of a December hike is very low and we have reached the end of hiking cycle,” said the economists led by Amy Yang.

Deutsche Bank expects the U.S. economy to fall into a mild recession early in 2024 and the Fed to begin cutting rates in June. The rest of Wall Street is split on whether a recession could occur as the job market and inflation slow under the weight of high rates and yields.

Fed officials themselves talked about how uncertain the outlook for the economy is at their last policy meeting three weeks ago.

Strong spending by U.S. households could keep the economy humming, but Fed officials said at the meeting that the potential for another U.S. government shutdown and resumption of student loan repayments could act as possible weights, according to minutes released Tuesday.

Officials said at the meeting that they’ll make upcoming decisions on rates based on what incoming reports say about inflation and the economy, and that “data arriving in coming months would help clarify” what’s a muddied outlook.

In stock markets abroad, indexes were mixed and made mostly modest moves across Europe and Asia.

ASX 200 expected to fall

The Australian share market looks set for a subdued session on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning.

Wall Street’s rally ran out of momentum Tuesday, and stocks drifted lower a day after hitting their highest level since the start of August.

The S&P 500 slipped 9.19 points, or 0.2%, to 4,538.19 for just its third loss in the last 17 days. The Dow Jones Industrial Average dropped 62.75, or 0.2%, to 35,088.29, and the Nasdaq composite dipped 84.55, or 0.6%, to 14,199.98.

Retailers were mixed after several reported their earnings for the latest quarter and, more importantly, their forecasts for the upcoming holiday shopping season.


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