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

NetEase

27/09/2024 19:56

* 
      U.S. PCE stands at 2.2% in Aug
    

        * 
      Russell 2000 index up 1.5%
    

        * 
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        * 
      Costco slips after Q4 revenue misses estimates
    

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      Indexes: Dow up 0.45%, S&P 500 down 0.06%, Nasdaq down
0.32% 
    

  
 (Updates to 2:21 p.m.)
    By Echo Wang
       Sept 27 (Reuters) - 
    The blue-chip Dow Jones Industrial Average hit a new record
high on Friday as investors cheered a tame inflation report that
also boosted small-cap stocks which should benefit from lower
interest rates.
  
         Wall Street's benchmark S&P 500 index dipped, as did
the technology-heavy Nasdaq composite, but both remained near
record highs hit in recent sessions. All three indexes were
poised to secure 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.
        At 2:21 p.m. the Dow Jones Industrial Average  .DJI  was
up 191.49 points, or 0.45%, to 42,366.60, the S&P 500  .SPX 
dipped 3.51 points, or 0.06%, to 5,741.78 and the Nasdaq
Composite  .IXIC  slipped 58.08 points, or 0.32%, to 18,132.02. 
  
    The Russell 2000 index  .RUT , which tracks small caps that
fare better in a low rate environment, gained 1.5% to a one-week
high.
    Eight out of the 11 S&P 500 sectors were higher, led by a
1.61% rise in energy stocks  .SPNY , while technology stocks
 .SPLRCT  declined 0.97%.
    Nvidia  NVDA.O  lost 2.56%, weighing on a dip on the
technology-heavy Nasdaq.
    Investors now slightly favor a bigger 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. 
    Markets will parse through remarks from Fed Governor
Michelle Bowman later in the day.
    Late on Thursday, Fed Governor Lisa Cook said the central
bank's rare move earlier this month could address increased
"downside risks" to employment. 
    Among individual stocks, Bristol-Myers Squibb  BMY.N  surged
2.63% after the U.S. FDA approved its schizophrenia drug.
    Costco Wholesale  COST.O  dropped 1.92% after posting
downbeat fourth-quarter revenue.
    U.S.-listed shares of Chinese firms such as Alibaba  BABA.N 
rose 2.99%, PDD Holdings  PDD.O  climbed 3.63% and NetEase
 NTES.O  gained 2.73% after China's central bank lowered
interest rates and injected liquidity into the banking system.
    The optimism spilled over to miners such as Arcadium
 ALTM.N , which added 2.31%, and U.S.-listed shares of BHP
 BHP.N  rose 1.83%. 
        Advancing issues outnumbered decliners by a 1.99-to-1
ratio on the NYSE. There were 519 new highs and 24 new lows on
the NYSE.
  
        The S&P 500 posted 40 new 52-week highs and no new lows
while the Nasdaq Composite recorded 70 new highs and 59 new
lows.
  

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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;))