US STOCKS-Wall St ends sharply higher, rebounding with a boost from chips

AAR

21/12/2023 21:20

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      Micron jumps on upbeat quarterly revenue forecast
    

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      Q3 GDP growth trimmed, continuing jobless claims elevated
    

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      Indexes up: Dow 0.87%, S&P 1.03%, Nasdaq 1.26%
    

  
 (Updates with closing prices)
    By Stephen Culp
       NEW YORK, Dec 21 (Reuters) - U.S. stocks closed higher
on Thursday, winning back much of the previous day's losses, as
economic data fueled optimism that the Federal Reserve would
ease monetary policy and revived investor risk appetite.
    All three major U.S. stock posted gains as chips surged, led
by Micron Technology  MU.O  after its better-than-expected
quarterly forecast, putting the tech-heavy Nasdaq  .IXIC  out
front.
    The rally gained momentum as the session drew to a close,
with the S&P 500  .SPX  and the Nasdaq surging more than 1%.
    Data on Thursday showed third-quarter U.S. economic growth
was not as robust as originally stated, and cracks are appearing
in the tight labor market, which the Fed considers an obstacle
to cooling inflation.
    "The fact that the third-quarter GDP number wasn't revised
upward, and in fact was cut, is giving investors comfort that
the path the Fed is on, which they enunciated last week, isn't
going to change any time soon," said Peter Tuz, president of
Chase Investment Counsel in Charlottesville, Virginia.
    U.S. stocks abruptly sank late Wednesday afternoon, snapping
a multi-session rally, in a sell-off possibly accelerated by
hedging activity associated with short-dated option trades.
    "The investor narrative yesterday was about profit taking on
the heels of a very long consistent holiday rally," said Greg
Bassuk, chief executive of AXS Investments in New York. 
    "Investors would be prudent to buy on these dips," Bassuk
said, adding that he believes stocks "will end the year
strongly."
    Financial markets are pricing in a 71.3% likelihood that the
U.S. central bank will reduce the Fed funds target rate by 25
basis points as soon as March, according to CME's FedWatch tool.
  
    The market is awaiting the Commerce Department's personal
consumption expenditures (PCE) report due on Friday, which will
cover income growth, consumer spending and inflation.
    The Dow Jones Industrial Average  .DJI  rose 322.35 points,
or 0.87%, to 37,404.35, the S&P 500  .SPX  gained 48.4 points,
or 1.03%, at 4,746.75 and the Nasdaq Composite  .IXIC  added
185.92 points, or 1.26%, at 14,963.87.
    All 11 major sectors of the S&P 500 ended in positive
territory, and consumer discretionary stocks  .SPLRCD  enjoyed
the biggest percentage gains.
    Micron Technology  MU.O  forecast quarterly revenue above
market estimates, and its shares jumped 8.6% on signs of a
memory chip recovery in 2024 after one of the most significant
downturns in years.
    The Philadelphia SE semiconductor index  .SOX , housing chip
stocks, advanced 2.8%.
    U.S. electric vehicle makers Tesla  TSLA.O , Lucid Group
 LCID.O  and Rivian Automotive  RIVN.O  rose between 1.6% and
3.0% after a report said the United States was considering
tariff hikes on Chinese EV manufacturers.
    Triumph Group  TGI.N  soared 32.9% after the aerospace
supplier said it would sell its components aftermarket business
to AAR Corp  AIR.N  for $725 million.
    U.S.-listed shares of Blackberry  BB.N  tumbled 12.7% after
its fourth-quarter revenue estimates landed below expectations.
    Advancing issues outnumbered decliners on the NYSE by a
3.65-to-1 ratio; on Nasdaq, a 2.79-to-1 ratio favored advancers.
    The S&P 500 posted 17 new 52-week highs and one new low; the
Nasdaq Composite recorded 79 new highs and 68 new lows.
    Volume on U.S. exchanges was 10.88 billion shares, compared
with the 12.28 billion average for the full session over the
last 20 trading days.

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Jobless claims    https://tmsnrt.rs/3GT60FK
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 (Reporting by Stephen Culp; Additional reporting by Johann M
Cherian and Shristi Achar A in Bengaluru; Editing by Richard
Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))