US STOCKS-S&P 500, Nasdaq rise as investors await debt ceiling talks

First Republic Bank

22/05/2023 19:52

(Updates prices throughout; adds analyst comment, regional
banks)

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      U.S. debt limit talks to kick off at 5:30 p.m. ET
    

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      Some tech stocks lift Nasdaq, regional bank stocks up
    

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      China's Micron ban revives U.S. trade tensions
    

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      Indexes: Dow -0.3%, S&P +0.1%, Nasdaq +0.5%
    

  
    By Saeed Azhar and Shreyashi Sanyal
       NEW YORK, May 22 (Reuters) - 
    The S&P 500  .SPX  and the Nasdaq  .IXIC  rose modestly on
Monday, helped by gains in Alphabet and Meta Platforms, although
some investors refrained from big bets ahead of a fresh round of
talks about raising the U.S. debt ceiling.
    U.S. President Joe Biden and top congressional Republican
Kevin McCarthy were set to meet on Monday to discuss raising the
federal debt ceiling, just 10 days before the United States
could face an unprecedented default.
    "The market is in a holding pattern," said Nadia Lovell,
senior U.S. equity strategist at UBS Global Wealth Management in
New York.
        "We have to see how this debt ceiling stuff goes and the
resumption of negotiation around that. Also people are waiting
to hear more from the Fed."
  
    Comments by St. Louis Fed President James Bullard on Monday
that the Federal Reserve may still need to raise its benchmark
interest rate by another half-point this year pushed up the U.S.
dollar.
    Investors will look for clues on the monetary policy path
from a slew of Fed speakers and key data points this week such
as the April personal consumption expenditure (PCE) index and
durable goods. 
    The PCE index reading, the Fed's preferred inflation gauge,
is due on Friday.
    
    Technology-related stocks lifted the market, with Alphabet
Inc  GOOGL.O  rising 2.2% and Meta Platforms Inc  META.O  up
1.7%.
    "As debt ceiling drama intensifies mega-cap tech stocks have
become Wall Street's new favorite defensive trade," said Edward
Moya, senior market analyst at OANDA.
    Apple Inc  AAPL.O  fell 0.5% after Loop Capital downgraded
the iPhone maker's stock to "hold" from "buy," its first rating
cut in five months according to Refinitiv data. 
        In a move perceived as ramping up U.S.-China trade
tensions, Beijing barred chipmaker Micron Technology Inc  MU.O 
from selling memory chips to key domestic industries, sending
its shares down 3.3%.
    Regional banking stocks were lifted by news that PacWest
Bancorp  PACW.O  has agreed to sell a portfolio of 74 real
estate construction loans to a subsidiary of Kennedy-Wilson
Holdings Inc  KW.N .
    Pacwest shares surged 21.5%, Lender Western Alliance  WAL.N 
rose 7% and Comerica Inc  CMA.N  climbed 3.3%. 
    Shares of larger lenders were subdued, with JPMorgan Chase &
Co  JPM.N  down 0.7%, despite the company saying its net
interest income will rise $3 billion as interest payments
increase from its purchase of failed First Republic Bank this
year.
        The Dow Jones Industrial Average  .DJI  fell 106.01
points, or 0.32%, to 33,320.62; the S&P 500  .SPX  gained 5.51
points, or 0.13%, to 4,197.49; and the Nasdaq Composite  .IXIC 
added 64.21 points, or 0.51%, at 12,722.11.    
  
    Dow component Chevron Corp  CVX.N  dipped 0.7% after the oil
major said it would acquire PDC Energy Inc  PDCE.O  in an
all-stock transaction for $7.6 billion, including debt.
        Advancing issues outnumbered decliners on the NYSE by a
1.90-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favored advancers.
  
        The S&P 500 posted 18 new 52-week highs and nine new
lows; the Nasdaq Composite recorded 76 new highs and 69 new
lows.  
  

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Rates and inflation Rates and inflation    https://tmsnrt.rs/3U8HdD2
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 (Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru
and Saeed Azhar in New York; additional reporting by Sinead
Carew; Editing by Dhanya Ann Thoppil, Maju Samuel and Richard
Chang)
 ((Saeed.Azhar@thomsonreuters.com; +1 347 908-6341; Reuters
Messaging: saeed.azhar.reuters.com@reuters.net))