US STOCKS-US stocks rally as Fed holds rates, prompts hope for end to hikes

Paycom Software

01/11/2023 20:44

(For a Reuters live blog on U.S., UK and European stock
markets, click  LIVE/  or type LIVE/ in a news window.)

        * 
      Federal Reserve keeps interest rates steady
    

        * 
      US Treasury increases size of most debt auctions
    

        * 
      Private payrolls rise less than expected in October
    

        * 
      Estee Lauder slumps on dour forecast
    

        * 
      Indexes up: Dow 0.67%, S&P 1.05%, Nasdaq 1.64%
    

  
 (Updates prices throughout, adds comment in paragraphs 5,6)
    By Sinéad Carew and Amruta Khandekar
       Nov 1 (Reuters) - 
    Wall Street's major indexes closed higher on Wednesday with
the Nasdaq's 1.6% advance leading gains, after the U.S. Federal
Reserve kept interest 
    rates unchanged
     and comments from its top official fueled investor optimism
rate hikes were done even though the central bank left the door
open for more. 
  
    Fed Chair Jerome Powell said policy makers would proceed
carefully although they were not yet confident financial
conditions were restrictive enough to get inflation as low as
the central bank would like.
    Trading was choppy at the start of Powell's press conference
but the major equity indexes started to regain lost ground after
about 20 minutes, then went on to hit session highs.
    This was because the Fed's top official "wasn't as assertive
about higher-for-longer" rates as he has been in past press
conferences, according to Michael James, managing director of
equity trading at Wedbush Securities in Los Angeles.
    Charlie Ripley, senior investment strategist for Allianz
Investment Management, wrote that while there is still a
potential risk for the Fed to raise rates again, Powell's
commentary suggests that "the bar has become higher for rate
hikes." 
    Edward Moya, senior market analyst at Oanda wrote that while
Powell insisted he was keeping options open for a hike "he
didn’t seem very convincing." 
    The Dow Jones Industrial Average  .DJI  rose 221.71 points,
or 0.67%, to 33,274.58, the S&P 500  .SPX  gained 44.06 points,
or 1.05%, to 4,237.86 and the Nasdaq Composite  .IXIC  added
210.23 points, or 1.64%, to 13,061.47.
    Among the S&P 500's 11 major sectors only two lost ground
with energy  .SPNY  falling 0.3% while consumer staples
 .SPLRCS  edged down 0.06%. Top gainers were rate sensitive
information technology  .SPLRCT , which rose 2% and
communications services  .SPLRCL , which rose 1.8%.
    In individual stocks, Shares of Advanced Micro Devices
 AMD.O  jumped almost 10% after an upbeat forecast for sales of
chips for artificial intelligence signaled progress in its bid
to catch up with market leader Nvidia  NVDA.O .
    Earlier, the stock market was boosted from falling bond
yields after the U.S. Treasury Department said it will slow the
pace of increases in its longer-dated debt auctions in the
November-January quarter and expects it will need one more
additional quarter of increases after this to meet its financing
needs.
    Earnings season has been a mixed bag for stocks even though
79.7% of the 310 S&P 500 companies that had reported at the time
of LSEG's latest update beat analyst expectations for the
quarter while only 16.1% had fallen short of estimates.      
    Still investors were disappointed by many quarterly updates.
    Estee Lauder  EL.N  shares tumbled 18.9% after the beauty
products maker cut its annual profit outlook. And shares in
Payroll processor Paycom Software  PAYC.N  sank 38.5% after it
projected for  downbeat fourth-quarter revenue.
    Tinder owner Match Group  MTCH.O  dropped 15.3% after it
also forecast fourth-quarter revenue below estimates.
    Advancing issues outnumbered declining ones on the NYSE by a
2.36-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers.
        The S&P 500 posted 7 new 52-week highs and 30 new lows;
the Nasdaq Composite recorded 24 new highs and 297 new lows.
  
    Trading was brisk on U.S. exchanges with 11.20 billion
shares changing hands compared with the 10.67 billion average
for the last 20 sessions.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Rates and inflation Rates and inflation    https://tmsnrt.rs/3U8HdD2
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Sinéad Carew, Chuck Mikolajczak in New York,
Amruta Khandekar and Shashwat Chauhan in Bengaluru; Editing by
Sriraj Kalluvila, Dhanya Ann Thoppil, Maju Samuel and David
Gregorio)
 ((sinead.carew@thomsonreuters.com; +13322191897;))