US STOCKS-Dow closes at record high on tame inflation report that also boosts small caps

NetEase

27/09/2024 21:00

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      U.S. PCE stands at 2.2% in Aug
    

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      Russell 2000 index up 1.5%
    

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      Bristol-Myers gains after schizophrenia drug approval
    

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      Costco slips after Q4 revenue misses estimates
    

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      Indexes: Dow up, S&P 500 down, Nasdaq down
    

  
 (Updates to 4:00 PM ET)
    By Echo Wang
       Sept 27 (Reuters) - The blue-chip Dow Jones Industrial
Average closed at a record high on Friday as investors welcomed
a subdued inflation report that also lifted small-cap stocks
which stand to benefit from more interest rates cuts by the
Federal Reserve.
    The technology-heavy Nasdaq slipped and the S&P 500 edged
slightly lower but both indexes stayed close to recent record
highs. All three Wall Street indexes logged their third
consecutive week of gains.
    “The market at this point..(is) pretty much pricing in a
soft landing, and pricing in that we have defeated inflation,
and that the Fed will be able to lower rates without causing a
bunch of harm to the economy”, said Liz Young Thomas, head of
investment strategy at SoFi in New York.   
    The Commerce Department reported a moderate rise in consumer
spending while inflation pressures continued to ease.
Separately, the University of Michigan's final September reading
on consumer sentiment came in at 70.1, surpassing economists'
expectations of 69.3, according to a Reuters poll.
    According to preliminary data, the S&P 500  .SPX  lost 7.64
points, or 0.13%, to end at 5,737.68 points, while the Nasdaq
Composite  .IXIC  lost 73.41 points, or 0.40%, to 18,116.88. The
Dow Jones Industrial Average  .DJI  rose 130.51 points, or
0.31%, to 42,305.62.
    The Russell 2000 index  .RUT , which tracks small caps that
fare better in a low-rate environment, climbed to a one-week
high.
    Shares of Nvidia  NVDA.O  slipped, weighing on the
technology-heavy Nasdaq.
    Investors now slightly favor a 50-basis-point cut at the
Fed's next meeting with a 52.1% chance, up from a coin toss
before the data, as per the CME Group's FedWatch Tool.
    Cooling price pressures prompted the Fed to cut rates by 50
bps last week. Focus will now shift to a slew of labor market
reports due next week. 
    Among individual stocks, Bristol-Myers Squibb  BMY.N  surged
after the U.S. FDA approved its schizophrenia drug.
    Costco Wholesale  COST.O  dropped after posting downbeat
fourth-quarter revenue.
    U.S.-listed shares of Chinese firms, including Alibaba
 BABA.N , PDD Holdings  PDD.O  and NetEase  NTES.O  gained 
after China's central bank lowered interest rates and injected
liquidity into the banking system.
    The optimism extended to miners, with Arcadium  ALTM.N 
gaining, and U.S.-listed shares of BHP  BHP.N  also advancing.

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PCE, the shorter term view    https://reut.rs/3WXgbkd
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 (Reporting Echo Wang in New York; Additional Reporting by
Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Anil
D'Silva, Maju Samuel and David Gregorio)
 ((johann.mcherian@thomsonreuters.com;))