US STOCKS-S&P 500 surges to record high close on euphoria over Fed rate cut

Progyny

19/09/2024 21:20

* 
      Dow also posts record closing high
    

        * 
      BofA expects Fed to go for 75-bp cut in Q4
    

        * 
      US big banks rise after Fed's rate cut
    

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      S&P 500 +1.70%, Nasdaq +2.51%, Dow +1.26%
    

  
 (Updates with official closing figures, volume numbers,
advancers decliners, individual stocks)
    By Noel Randewich and Purvi Agarwal
       Sept 19 (Reuters) - The S&P 500 surged to a record high
close on Thursday, the day after the Federal Reserve cut
interest rates by 50 basis points and indicated more rate cuts
were on the horizon.
    Heavyweight stocks that have enjoyed much of this year's
stock market rally made fresh gains, with Tesla  TSLA.O  surging
over 7%, and Apple  AAPL.O  and Meta Platforms  META.O  each up
almost 4%.
        AI powerhouse Nvidia  NVDA.O  jumped 4%, helping lift
the PHLX semiconductor index  .SOX  surge 4.3%.
    Better-than-expected jobless claims data further stoked
global risk appetite.
    On Wednesday, the Federal Reserve announced a rate cut at
the high end of expectations, and said it had greater confidence
inflation was under control. Fed Chair Jerome Powell said the
U.S. economy remained strong and the central bank would decide
on the appropriate pace of future rate cuts.
    "The Fed has sanctioned a pretty strong economic picture
here, and so we're just seeing the money flow back into some of
the sectors that have perhaps underperformed so far this
quarter," said James Ragan, Director of Wealth Management
Research at D.A. Davidson.
    The small-cap Russell 2000 index  .RUT  rose 2.1% as lower
interest rates boosted prospects of reduced operating costs and
greater profits.
        The S&P 500 climbed 1.70% to end the session at 5,713.64
points, its highest close ever.
    
        The Nasdaq gained 2.51% to 18,013.98 points, while the
Dow Jones Industrial Average rose 1.26% to 42,025.19 points, its
highest close ever.
  
        Of the 11 S&P 500 sector indexes, eight rose, led by
information technology  .SPLRCT , up 3.08%, followed by a 2.2%
gain in consumer discretionary  .SPLRCD .
  
        In extended trade, Fedex  FDX.N  dropped 10% after the
company 
    cut
     its revenue target for its fiscal year 2025.
  
        
    BofA Global Research said it now expects a total of 75 basis
points in rate cuts by the end of this year, steeper than its
previous forecast of 50 bps.
    Evercore ISI data going back to 1970 showed the S&P 500 has
posted an average 14% gain in the six months following the first
reduction of a rate-cutting cycle.    
    September has generally been a disappointing month for U.S.
equities with the S&P 500 notching an average loss of 1.2% since
1928.
    The S&P 500 banks index  .SPXBK  rose 2.5%, with gains in
Citigroup  C.N  and Bank of America  BAC.N  after they lowered
their respective prime rates.
    Fertility benefits management firm Progyny  PGNY.O  plunged
33% after a significant client notified the company it had
elected to exercise a 90-day option to terminate its services
agreement.
    Advancing issues outnumbered falling ones within the S&P 500
 .AD.SPX  by a 2.4-to-one ratio.
        Across the U.S. stock market  .AD.US , advancing stocks
outnumbered falling ones by a 3.8-to-one ratio.
  
        Volume on U.S. exchanges was relatively heavy, with 12.3
billion shares traded, exceeding the average of 10.8 billion
shares over the previous 20 sessions.

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US inflation and interest rates    https://reut.rs/4esuPHd
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 (Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru
and by Noel Randewich in San Francisco; Editing by Nivedita
Bhattacharjee, Maju Samuel and David Gregorio)
 ((noel.randewich@thomsonreuters.com;))