US STOCKS-Wall St rallies as data supports view Fed may be done hiking rates

Applied Energetics

14/11/2023 21:51

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      U.S. headline, core CPI growth falls short of estimates
    

        * 
      Home Depot rises after beating profit estimates
    

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      Indexes: Dow up 1.4%, S&P 500 up 1.9%, Nasdaq up 2.4%
    

  
 (Updates close with volume and S&P 500 and Nasdaq posting
biggest daily gain since April 27)
    By Caroline Valetkevitch
       NEW YORK, Nov 14 (Reuters) - The S&P 500 and Nasdaq
posted their biggest daily percentage gains since April 27 on
Tuesday as softer-than-expected inflation data supported the
view that the Federal Reserve may be done raising interest
rates.
    The small-cap Russell 2000 index  .RUT  jumped 5.4%,
outperforming the broader market, while the rate-sensitive S&P
500 real estate sector  .SPLRCR  gained 5.3% and utilities
 .SPLRCU  rose 3.9%. All three registered their biggest daily
percentage increases since Nov. 10, 2022. 
    Data showed U.S. consumer prices were unchanged in October
as Americans paid less for gasoline, and the annual rise in
underlying inflation was the smallest in two years. In the 12
months through October, the CPI climbed 3.2% - below economists'
estimates - after rising 3.7% in September.
    "The clear catalyst was the softer-than-expected inflation
report," said Craig Fehr, head of investment strategy at Edward
Jones.
        "Getting some softer inflation readings provided markets
some additional comfort that the Fed isn't going to have to put
in place a significant amount of additional restrictive policy
to continue to bring consumer prices lower."
  
    Since March 2022, the Fed has hiked its policy rate 525
basis points to combat high inflation.
    The Dow Jones Industrial Average  .DJI  rose 489.83 points,
or 1.43%, to 34,827.7; the S&P 500  .SPX  gained 84.15 points,
or 1.91%, at 4,495.7; and the Nasdaq Composite  .IXIC  added
326.64 points, or 2.37%, at 14,094.38.
    Also, the KBW regional banking index  .KRX  rose 7.5% in its
biggest daily percentage rise since January 2021.
    "It's difficult with higher rates with the commercial real
estate on their balance sheets," said Quincy Krosby, chief
global strategist at LPL Financial in Charlotte, North Carolina.
    Expectations on the Fed cutting rates next year also shifted
following the day's data. U.S. rate futures on Tuesday priced in
a 65% chance of a rate cut in May, compared with 34% late on
Monday, according to the CME's FedWatch tool.
    Investors also focused on negotiations by U.S. lawmakers
over a funding bill as they face an end-of-week deadline to fund
the federal government.
    Among individual stocks, Snap Inc shares  SNAP.N  jumped
7.5% following news that Amazon.com  AMZN.O  will allow Snapchat
users in the United States to buy some products listed on the
ecommerce company directly from the social media app.
    Home Depot  HD.N  gained 5.4% after the U.S. home
improvement chain beat quarterly profit estimates.
    Volume on U.S. exchanges was 12.62 billion shares, compared
with the 11.09 billion average for the full session over the
last 20 trading days.
        Advancing issues outnumbered decliners on the NYSE by a
9.80-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favored advancers.
  
        The S&P 500 posted 45 new 52-week highs and no new lows;
the Nasdaq Composite recorded 106 new highs and 139 new lows.  
  


 (Reporting by Caroline Valetkevitch; additional reporting by
Sruthi Shankar and Amruta Khandekar in Bengaluru; additional
reporting by Ankika Biswas; Editing by Shinjini Ganguli and
Richard Chang)
 ((caroline.valetkevitch@thomsonreuters.com))