US STOCKS-Wall Street ends mixed as investors await debt ceiling talks

Greenhill & Co

22/05/2023 22:02

(Updates with closing prices)

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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: S&P 500 +0.02%, Nasdaq +0.50%, Dow -0.42%
    

  
    By Saeed Azhar and Shreyashi Sanyal
       NEW YORK, May 22 (Reuters) - 
    Wall Street finished mixed on Monday, with the Nasdaq helped
by gains in Alphabet and Meta Platforms, while the S&P 500 ended
near flat as 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.
    "Investors are basically saying, 'We're giving at least a
60:40 likelihood that they will come to an agreement in time,'"
said Sam Stovall, chief investment strategist at CFRA Research.
    "An agreement could simply be the extension, kicking it down
the road to decide on a debt ceiling when they also discuss the
budgets in September."
        The S&P 500  .SPX  edged up 0.02% to end at 4,192.63
points.
  
        The Nasdaq Composite Index  .IXIC  gained 0.50% at
12,720.78 points, while Dow Jones Industrial Average  .DJI 
declined 0.42% to 33,286.58 points.
  
    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 monetary policy 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 1.87% and Meta Platforms Inc  META.O 
adding 1.1%.
    "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  dropped 0.55% 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 2.85% lower.
    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 almost by a fifth, leading stocks of
some of the other regional banks' higher. 
    Shares of larger lenders were subdued, with JPMorgan Chase &
Co  JPM.N  0.8% lower 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.
        "Everyone should be prepared for rates going higher from
here," JPMorgan CEO Jamie Dimon said at the bank's investor day
Monday. "Five percent's not high enough for Fed funds - I've
been advising this to clients, and banks, you should be prepared
for six, seven."
  
        Shares of Pfizer Inc  PFE.N  surged over 5% after its
diabetes drug, in a mid-stage trial involving patients with type
2 diabetes, resulted in weight loss similar to that of Novo
Nordisk's  NOVOb.Co  Ozempic, data published in a medical
journal showed.
  
    Shares of Greenhill & Co  GHL.N  more than doubled after
Mizuho Financial Group Inc  8411.T  will buy the U.S. M&A
advisory firm for $550 million including debt.
    Dow component Chevron  CVX.N  dipped 1.8% 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
1.54-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favored advancers.
        The S&P 500 posted 18 new 52-week highs and nine new
lows; the Nasdaq Composite recorded 88 new highs and 78 new
lows. 
  
        Volume on U.S. exchanges was relatively light, with 9.6
billion shares traded, compared to an average of 10.6 billion
shares over the previous 20 sessions.
  

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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))