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

Greenhill & Co

22/05/2023 21:00

(Updates throughout; adds analyst comment, closing indexes)

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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
    

  
    By Saeed Azhar and Shreyashi Sanyal
       NEW YORK, May 22 (Reuters) - 
    Wall Street finished mixed on Monday, helped by gains in
Alphabet and Meta Platforms, while 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.
    "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."
        According to preliminary data, the S&P 500
 .SPX  gained 0.72 points, or 0.02%, to end at 4,192.70 points,
while the Nasdaq Composite  .IXIC  gained 62.61 points, or
0.50%, to 12,720.51. The Dow Jones Industrial Average
 .DJI  fell 139.62 points, or 0.42%, to 33,287.01.
    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 gains at
Alphabet Inc  GOOGL.O  and Meta Platforms Inc  META.O .
    "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 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 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, while other regional lenders such as 
Western Alliance  WAL.N  and Comerica Inc  CMA.N  both climbed. 
    Shares of larger lenders were subdued, with JPMorgan Chase &
Co  JPM.N  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.
    Shares of Greenhill & Co  GHL.N  doubled after Mizuho
Financial Group Inc  8411.T  will buy the U.S. M&A advisory firm
for $550 million including debt.
    Japan's No. 3 lender eyes a bigger share of the world's
largest investment-banking fee pool.
    Dow component Chevron Corp  CVX.N  dipped after the oil
major said it would acquire PDC Energy Inc  PDCE.O  in an
all-stock transaction for $7.6 billion, including debt.

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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))