Wall Street closes higher as upbeat economic data eases recession fears

  • Upbeat economic data boosts mood
  • Walgreen Boots falls after profit warning
  • Nasdaq posts biggest H1 gain since 1983
  • Indexes: Nasdaq 1.65%, S&P 1.15%, Dow 0.63%

June 27 (Reuters) – U.S. stock indexes rebounded from recent losses on Tuesday as upbeat economic data eased investor concerns about an imminent recession fueled by the Federal Reserve’s aggressive interest rate hikes.

Separate reports showed new orders for key U.S. manufactured capital goods rose unexpectedly in May, sales of new single-family homes rose in the same month, while U.S. consumer confidence rose to a 1-1/2-year high in June.

The data gave investors reason to buy back stocks after a „pretty vicious correction” over the past several sessions, said Mark Lushini, chief investment strategist at Johnnie Montgomery Scott in Philadelphia.

„What we have today is a continuum of economic output that fits this system of the economy in equilibrium, while at the same time continuing in expansionary mode, without suggesting that there are any conditions that run too hot.”

A few days before the end of the second quarter, Luschini noted that some of the best sector performers, such as Consumer Discretionary ( .SPLRCD ) and Technology ( .SPLRCT ), were also the market’s biggest gainers in a year. By date.

While the economic data is encouraging, Rhys Williams, chief strategist at Spotting Rock Asset Management, said so-called window-dressing could help the market, when fund managers add better-performing assets to their portfolios for their quarterly reports.

„You can have a bad week in the stock market last week and a bad day on Monday. It’s a bit of a recovery,” Williams said. „There may also be some quarter-end window dressing as we approach the end of the quarter.”

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The blue-chip Dow Jones Industrial Average (.DJI) snapped a six-day losing streak on Tuesday, while the tech-heavy Nasdaq Composite (.IXIC) posted its best first-half performance in 40 years and the S&P 500 (.SPX) advanced after falling in five of the past six sessions.

The Dow Jones Industrial Average (.DJI) rose 212.03 points, or 0.63%, to 33,926.74; The S&P 500 (.SPX) rose 49.59 points, or 1.15%, to 4,378.41; And the Nasdaq Composite (.IXIC) added 219.90 points, or 1.65%, to 13,555.67.

Signs of a US economic slowdown saw the Dow Jones Industrial Average (.DJT) rise 2.7% and the small-cap Russell 2000 Index (.RUT) rise 1.5%.

The PHLX Housing Index (.HGX) closed up 2.99% after hitting an all-time high on Tuesday.

Traders priced in a 77% chance the Fed will raise interest rates by 25 bps at its July meeting to a range of 5.25%-5.50%, according to CME Group’s Fedwatch tool.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on June 22, 2023. REUTERS/Brendan McDermid/File Photo

More economic data is expected this week, including a key inflation gauge and a speech by central bank chief Jerome Powell at the European Central Bank Forum in Sintra, Portugal, which could provide clues on the path of interest rates.

Powell’s dovish comments last week pushed the S&P 500 and Nasdaq to more than one-year highs and the Dow to six-month highs.

Despite recent market weakness, a surge in growth stocks, an upbeat earnings season and hopes that the central bank will soon end its monetary tightening set key indexes for quarterly gains.

Market heavyweights Microsoft Corp ( MSFT.O ) and Apple Inc ( AAPL.O ) provided the biggest boost to the S&P 500 during the session, while Amazon.com Inc ( AMZN.O ), Tesla Inc ( TSLA.O ) and Nvidia Corp ( NVDA.O ).

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Shares of Meta Platforms Inc ( META.O ) rose 3% after Citigroup raised its price target on the stock.

Snowflake ( SNOW.N ) rose 4.2% after the cloud data analytics company announced a partnership with Nvidia to allow customers to build artificial intelligence models using their own data.

Shares of Walgreens Boots Alliance ( WBA.O ) fell 9.3% as the pharmacy chain cut its annual profit forecast due to lower demand for Covid-19 tests and vaccines.

Other drugstore chains also fell, including CVS Health Corp ( CVS.N ) and Rite Aid Corp ( RAD.N ).

Shares of Lordstown Motors Corp ( RIDE.O ) fell 17.2% after the U.S. electric truck maker filed for bankruptcy protection and went up for sale.

Advancing issues outnumber decliners on the NYSE by a 2.55-to-1 ratio; On the Nasdaq, the ratio was 1.54-to-1 in favor of the advancers.

The S&P 500 posted 46 new 52-week highs and one new low; The Nasdaq Composite posted 64 new highs and 150 new lows.

10.16 billion shares changed hands on US exchanges, compared with an average of 11.63 billion for the past 20 sessions.

Reporting by Sinead Carew, Shruti Shankar in New York, Johan M Cherian in Bangalore and Terence Gabriel in New York; Editing by Shinjini Ganguly and Richard Chang

Our Standards: Thomson Reuters Trust Principles.

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