US STOCKS-Wall Street indexes end sharply higher on optimism about debt ceiling

Tuesday Morning

26/05/2023 21:27

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      Biden, McCarthy appear to close in on US debt ceiling deal
 
    

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      Marvell Technology jumps on upbeat forecast
    

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      Ford up rallies on deal to use Tesla's charging stations
    

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      Indexes close: S&P 500 +1.30%, Nasdaq +2.19%, Dow +1.00%
    

  
 (Updates with price moves after market close)
    By Noel Randewich and Shristi  Achar A
       May 26 (Reuters) - U.S. stocks finished sharply higher
on Friday as talks on raising the U.S. debt ceiling progressed,
while chip stocks surged for a second straight day on optimism
about artificial intelligence.
    After several rounds of talks, U.S. President Joe Biden and
top congressional Republican Kevin McCarthy appeared to be
nearing a deal to increase the government's $31.4 trillion debt
limit for two years, while capping spending on most items, a
U.S. official told Reuters.
    The Dow Jones Industrial Average  .DJI  ended a five-day
losing streak, while the Nasdaq Composite Index  .IXIC  and S&P
500  .SPX  closed at their highest levels since August 2022,
with the S&P 500 above 4,200 points. 
    The Philadelphia Semiconductor Index  .SOX  jumped 6.3%,
bringing its gain in the past two sessions to over 13%. Building
on recent euphoria related to AI, Marvell Technology Inc
 MRVL.O  jumped 32% after the chipmaker said it would double its
annual revenue related to AI.
    Investors were closely watching debt ceiling talks as Biden
and McCarthy still seemed at odds over several issues heading
into the long weekend, with the U.S. stock market closed on
Monday for the Memorial Day holiday.
    "All the signs point to a deal getting done and this rally
being sustained, but if we get through the weekend and we don't
have a deal or it falls apart in some way, then we're going to
wake up Tuesday morning to some pretty material losses," said
Scott Ladner, chief investment officer at Horizon Investments in
Charlotte, North Carolina.
    Nvidia Corp's  NVDA.O  stock climbed 2.5%, adding to its 24%
gain on Thursday following its blowout forecast and elevating
its stock market value to around $960 billion, according to
Refinitiv.
    
    
        The S&P 500 climbed 1.30% to end at 4,205.45 points.
  
        The Nasdaq gained 2.19% at 12,975.69 points, while Dow
Jones Industrial Average rose 1.00% to 33,093.34 points.
  
        Of the 11 S&P 500 sector indexes, eight rose, led by
information technology  .SPLRCT , up 2.68%, followed by a 2.38%
gain in consumer discretionary  .SPLRCD .
  
        Volume on U.S. exchanges was relatively light, with 9.8
billion shares traded, compared to an average of 10.5 billion
shares over the previous 20 sessions.
  
        For the week, the S&P 500 rose 0.3%, the Dow fell 1.0%
and the Nasdaq jumped 2.5%.
  
    Data showed U.S. consumer spending increased more than
expected in April and inflation picked up, which could prompt
the Federal Reserve to raise interest rates again next month.
    "We still have inflation, we still have higher interest
rates and that will continue to be an overhang for the market
until the Federal Reserve goes on the sidelines," said David
Sadkin, president at Bel Air Investment Advisors.
    Traders now see a 60% chance of a 25-basis-point hike by the
Fed in its June policy meet, up from about 40% before the data,
according to the CME FedWatch tool.
    Ford Motor Co  F.N  jumped 6.2% after the automaker signed a
deal allowing customers to access more than 12,000 Tesla Inc
 TSLA.O  Superchargers in North America in early 2024. Tesla
jumped 4.7%.
    Ulta Beauty Inc  ULTA.O  plummeted 13.4% after the cosmetics
retailer cut its annual operating margin forecast. 
    Paramount Global  PARA.O  rallied 5.9% after the media
conglomerate's controlling shareholder National Amusements
received a $125 million investment. 
        Advancing issues outnumbered falling ones within the S&P
500  .AD.SPX  by a 2.2-to-one ratio.
  
        The S&P 500 posted 17 new highs and 15 new lows; the
Nasdaq recorded 77 new highs and 115 new lows.
  

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 (Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru
and by Noel Randewich in Oakland, Claifornia; Editing by Maju
Samuel, Vinay Dwivedi and Richard Chang)
 ((noel.randewich@tr.com; Twitter: @randewich))