US STOCKS-Stocks rally to close out strong week, await Trump policies
17/01/2025 21:00
*
Barclays lifts PTs on Nvidia, Broadcom
*
Qorvo surges on Starboard stake
*
Intel climbs on takeover speculation
(Updates to U.S. market close)
By Chuck Mikolajczak
NEW YORK, Jan 17 (Reuters) -
U.S. stocks rallied on Friday to close out a strong week on
optimism over the health of the economy and path of interest
rates as investors braced for a slew of policy changes under the
incoming Trump administration.
The S&P 500 and Dow Industrials registered their biggest
weekly percentage gains since early November and the Nasdaq
recorded its best since early December. Data this week allayed
fears that inflation would resurge while expectations have grown
that the Federal Reserve will bump up the timing and magnitude
of rate hikes this year.
The Commerce Department reported on Friday that U.S.
single-family
homebuilding rose
to a 10-month high although demand will likely be curbed by
rising mortgage rates and an oversupply of new properties.
A separate report revealed a surge in manufacturing
output last month.
President-elect Donald Trump will be inaugurated on
Monday, when U.S. markets will close for the Martin Luther King
Jr. Day holiday.
Uncertainty over the potential for some of Trump's
policies such as tariffs to rekindle rising inflation pressures
and slow the path of Fed rate cuts has weighed on equities in
recent weeks.
But a solid start to the corporate earnings season with
results from many big banks has also helped buoy stocks this
week, with the S&P 500 bank index .SPXBK up nearly 7% on the
week.
"Stronger growth, feeding into better corporate
earnings, you're kind of getting off to a start to the year here
that there's plenty of questions both in terms of fiscal and
monetary policy and what the Trump agenda will look like, or
what shape it will take," said Jim Baird, chief investment
officer at Plante Moran Financial Advisors in Southfield,
Michigan.
"Despite all those questions, we're starting the year on
a reasonably better footing than we've been on perhaps in the
last few years."
According to preliminary data, the S&P 500
.SPX gained 59.48 points, or 1.01%, to end at 5,996.82 points,
while the Nasdaq Composite .IXIC gained 291.91 points, or
1.51%, to 19,630.20. The Dow Jones Industrial Average
.DJI rose 338.82 points, or 0.79%, to 43,491.95.
The benchmark U.S. 10-year note yield US10YT=RR was little
changed at 4.609%, but has eased off a 14-month high of 4.809%
hit earlier this week.
Cleveland Fed President Beth Hammack said
inflation remains
a problem, as recent data has pointed to a resilient
economy. However, Fed Governor Christopher Waller
indicated
on Thursday the central bank could cut rates sooner and
faster than expected as inflation is likely to continue to ease.
The Fed is widely expected to keep rates steady at its
policy meeting later this month, with the markets pricing in a
greater than 50% chance for a cut of at least 25 basis points
until June, LSEG data showed.
Ten of the 11 S&P 500 sectors rose, led by a gain of
more than 2% in consumer discretionary .SPLRCD stocks, while
healthcare .SPXHC was the sole decliner.
Nvidia NVDA.O and Broadcom AVGO.O advanced after
Barclays raised its price targets on the stocks, helping to
boost the PHLX semiconductor index .SOX by almost 3%.
In addition, Intel INTC.O surged on
speculation
of a takeover and Qorvo QRVO.O shot up after activist
investor
Starboard Value disclosed
a 7.7% stake in the chipmaker.
Shares of social media firms such as Meta META.O had a
muted reaction after the Supreme Court ruled against TikTok's
challenge to a law that would force its app's sale or ban in the
United States. Meta shares rose modestly while Snap SNAP.N
dipped.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
housing starts and building permits https://reut.rs/42kjNRK
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Chuck Mikolajczak; Aadditional reporting by
Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by
Richard Chang)
((charles.mikolajczak@tr.com; @ChuckMik))