US stocks rise as traders process economic data, await Fed minutes

U.S. stock indexes rose on Wednesday as investors digested a package of economic data and awaited the final minutes of the Federal Open Market Committee meeting.

How are stock indices traded?
  • The Dow Jones Industrial Average

    rose 136 points, or 0.4%, to 34,233

  • S&P 500

    gained 18 points, or 0.5%, to 4,022

  • The Nasdaq Composite

    added 83 points, or 0.7%, to 11,260

The shares ended with a rise of Tuesday, with the S&P 500 closing down 53.64 points, or 1.4%, to 4,003.58, the Dow Industrials gaining 397.82 points, or 1.2%, to close at 34,098.10. The Nasdaq Composite advanced 149.89 points, or 1.4%, to close at 11,174.40.

What drives the markets?

Stocks rose on Wednesday, trying to extend Tuesday’s gains, which were driven in part by continued hopes that the Federal Reserve will slow the pace at which it raises interest rates.

Minutes of the November meeting, due at 2:00 PM Eastern, will be closely monitored for clues about how high the federal funds rate needs to go and how long it will stay there to bring inflation under control. The Fed raised its benchmark interest rate by 0.75 percentage points to a range of 3.75% to 4% at the last meeting.

“Investors may be looking for clues that they acted prematurely or that there is actually more support for such a tightening delay and less for a higher final rate than they previously thought,” said Craig Erlam, senior market analyst at OANDA, in note to customers.

Read: This is not a “close your eyes and buy anything” kind of market.

In US economic data, US durable goods orders up 1% in October, while claims for unemployment benefits increased by 17,000 up 240,000 in the past week, the highest level since August. Meanwhile, S&P Global released the U.S. Services Purchasing Managers’ Index in November fell to 46.1 of 47.8. The S&P Global flash U.S. manufacturing purchasing managers’ index fell to 47.6 in November from 50.7. Any number below 50 reflects a contracting economy.

The latest November University of Michigan consumer sentiment index fell in November to 56.8 and remained depressedwhich reflects concerns about high inflation and the growing possibility of a recession.

US New Home Sales advanced 7.5% to a seasonally adjusted annual rate of 632,000 in October from a revised 588,000 in the previous month, the Commerce Department said on Wednesday.

US stock exchanges will be closed for Thanksgiving on Thursday, Nov. 24, and reopens the next day only for a shortened session on Black Friday, the annual year-end shopping event, with trading ending at 1 p.m. Eastern on Nov. 25.

Bond yields held steady, with that of the 10-year Treasury

trading around 3.711% and 2-yr

at 4.492%.

The spread between 2- and 10-year government bond yields ended Tuesday’s session at minus 76 basis points, the most inverted since Oct. 5, 1981, which some said pointed to an imminent recession.

Elsewhere, oil prices

were moderately lower, while natural gas futures

rose 8% to $7.982 per million British thermal units, with European natural gas futures also rising after Russian energy giant Gazprom threatened to cut supplies through a Ukrainian pipeline to Europe. Markets are also awaiting news of an agreement between the US and its allies above the Russian oil price ceiling.

Companies in focus
  • Manchester United‘c

    availability climbed 14% on Wednesday after the club’s owners confirmed they were exploring potential financial investment or an outright sale of the legendary Premier League club.

  • HP Inc.

    shares fell 0.9% Wednesday, after company executives on Tuesday announced plans to cut up to 10 percent of its workforce in the coming years while issuing weaker-than-expected revenue guidance.

  • Credit Suisse

    shares fell 5.5% on Wednesday after the bank’s shareholders overwhelmingly approve a plan to raise 4 billion francs ($4.2 billion) on Wednesday. With two votes, shareholders supported a private placement plan as well as a discounted stock rights offering.

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