US STOCKS-Wall Street gains on final stretch of 2023, rate cuts in view

Gracell Biotechnologies

26/12/2023 19:41

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      Intel up on $3.2 bln grant from Israel
    

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      Manchester United rises as Jim Ratcliffe takes 25% stake
    

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      Indexes up: Dow 0.41%, S&P 0.40%, Nasdaq 0.44%
    

  
 (Updates to 14:10 EST)
    By Stephen Culp
       NEW YORK, Dec 26 (Reuters) - 
    U.S. stocks advanced on Tuesday, extending an eight-week
rally in the year's final week on expectations that the Federal
Reserve will begin cutting interest rates as soon as March.
  
    All three major U.S. stock indexes were in positive
territory in light trading, with interest rate sensitive megacap
stocks and chip shares leading the upward momentum.
    All three are on track for monthly, quarterly and annual
gains.
    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.
    "It's going to be a fairly quiet trading session. The
momentum stays towards the upside, but I don't think we're going
to see any strong volume that would suggest we could be in for a
strong rally," said Peter Cardillo, chief market economist at
Spartan Capital Securities in New York.
    "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.
    At 2:10 p.m. ET, the Dow Jones Industrial Average  .DJI 
rose 152.85 points, or 0.41%, to 37,538.82, the S&P 500  .SPX 
gained 18.88 points, or 0.40%, at 4,773.51 and the Nasdaq
Composite  .IXIC  added 66.63 points, or 0.44%, at 15,059.61.
    All 11 major sectors of the S&P 500 were green.
    Energy shares  .SPNY  enjoyed the heftiest percentage gain,
of more than 3%, 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 2.9% 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  shot up 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 4.7% 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
3.68-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored advancers.
    The S&P 500 posted 41 new 52-week highs and no new lows; the
Nasdaq Composite recorded 186 new highs and 38 new lows.  

 (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;))