US STOCKS-Wall Street advances as Fed keeps rates steady; Powell sounds less hawkish

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01/11/2023 20:00

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 (Updated with preliminary closing prices 04:00 p.m. ET/2000
GMT)
    By Sinéad Carew and Amruta Khandekar
       Nov 1 (Reuters) - 
    Wall Street's major indexes closed higher on Wednesday after
the U.S. Federal Reserve kept interest 
    rates unchanged
     and comments from its top official reassured investors even
as he left the door open for further hikes and pointed to
economic strength. 
  
        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 some lost ground
after about 20 minutes. 
        This was because the Fed's top official didn't sound as
"definitively hawkish" as he had in previous press conferences,
according to Michael James, managing director of equity trading
at Wedbush Securities in Los Angeles. 
  
        "He wasn't as assertive about higher-for-longer, as he
has been in the past. That's one takeaway bulls will be focused
on, even though he indicated the Fed still has a ways to go to
get to its 2% target," said James.
  
    According to preliminary data, the S&P 500
 .SPX  gained 43.80 points, or 1.04%, to end at 4,237.60 points,
while the Nasdaq Composite  .IXIC  gained 210.23 points, or
1.64%, to 13,061.47. The Dow Jones Industrial Average
 .DJI  rose 223.06 points, or 0.67%, to 33,275.93.
    Ellen Hazen, chief market strategist at F.L.Putnam
Investment Management in Wellesley, Massachusetts said it was
"hard to say if we are at the end of hikes."
    "The Fed very much wants to keep the door open for
additional hikes in December or next year. They did make a few
changes to the wording, two of which reflect the assessment that
the economy is actually stronger than it was at the last
statement," said Hazen, also noting that the Fed changed its
reference to job gains from "slowed" to "moderated."
    "Both of those are on the positive side," Hazen said.
    Earlier the stock market got a boost 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 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, had 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 after the beauty products
maker cut its annual profit outlook. And shares in Payroll
processor Paycom Software  PAYC.N  sank after it projected for 
downbeat fourth-quarter revenue.
    Tinder owner Match Group  MTCH.O  fell after it also
forecast fourth-quarter revenue below estimates.

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 (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;))