US STOCKS-Wall Street ends higher in final stretch of 2023, rate cuts in view

Gracell Biotechnologies

26/12/2023 21:26

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      Intel up on $3.2 bln grant from Israel
    

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      S&P 500 touches highest intraday level since Jan. 2022
    

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      Manchester United rises as Jim Ratcliffe takes 25% stake
    

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      Indexes up: Dow 0.43%, S&P 0.42%, Nasdaq 0.54%
    

  
 (Updates with closing prices)
    By Stephen Culp
       NEW YORK, Dec 26 (Reuters) - U.S. stocks extended their
rally on Tuesday, kicking off the final week of 2023 with
expectations that the Federal Reserve will begin cutting
interest rates as soon as March.
    All three major U.S. stock indexes rose in light trading a
day after the Christmas holiday, with the S&P 500 touching its
highest intraday level since January 2022. All three are on
track for monthly, quarterly and annual gains.
        Interest rate sensitive megacap stocks and chip shares
led the upward momentum.
    On Friday, the three indexes notched their eighth straight
weekly gains - their longest weekly winning streaks in years -
as economic data indicated inflation is easing down closer to
the Fed's average annual 2% target.
        "The momentum stays towards the upside," said Peter
Cardillo, chief market economist at Spartan Capital Securities
in New York, noting however that a strong rally was unlikely in
light trading.
  
    "We had a good inflation number on Friday. If inflation
continues to move down in January and February, there's a good
chance that the Fed may cut (rates) earlier than anticipated."
    The S&P 500 is on track to post its biggest quarterly gain
in three years, and is within 0.5% of its all-time closing high
reached in January 2022.
    Closing above that level - 4,796.56 - would confirm the
benchmark index has been in a bull market since touching the
bear market nadir, the closing low reached in October 2022.
    Stocks' eight-week rally shifted into overdrive two weeks
ago after the Fed signaled the end of its rate hike cycle and
opened the door to potential rate cuts in 2024.
    At last glance, markets had baked in a 72.7% likelihood of a
25 basis point reduction in the Fed funds target rate as soon as
March, according to CME's FedWatch tool.
    The Dow Jones Industrial Average  .DJI  rose 159.36 points,
or 0.43%, to 37,545.33, the S&P 500  .SPX  gained 20.12 points,
or 0.42%, to 4,774.75 and the Nasdaq Composite  .IXIC  added
81.60 points, or 0.54%, to 15,074.57.
        All 11 major sectors of the S&P 500 ended in the green.
  
    Energy shares  .SPNY  enjoyed the heftiest percentage gain,
boosted by surging crude prices  CLc1  as Middle East strife
ratcheted up supply concerns, while optimism over Fed rate cuts
fueled demand hopes.
    Shares of Manchester United  MANU.K  rose 3.4% after
billionaire Jim Ratcliffe struck a long-awaited deal to buy a
25% stake in the soccer club at $33 per share.
    Gracell Biotechnologies  GRCL.O  surged 60.3% after
AstraZeneca  AZN.L  said it will buy the China-based firm for up
to $1.2 billion.
    Intel Corp  INTC.O  rose 5.2% following the Israeli
government's agreement to endow a $3.2 billion grant for a $25
billion plant the chipmaker plans to build in southern Israel.
    Advancing issues outnumbered decliners on the NYSE by a
3.31-to-1 ratio; on Nasdaq, a 2.25-to-1 ratio favored advancers.
    The S&P 500 posted 50 new 52-week highs and no new lows; the
Nasdaq Composite recorded 222 new highs and 48 new lows. 
    Volume on U.S. exchanges was 9.99 billion shares, compared
with the 12.56 billion average for the full session over the
last 20 trading days.

 (Reporting by Stephen Culp; Additional reporting by Shubham
Batra and Amruta Khandekar in Bengaluru; Editing by Richard
Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))