Wall Street is rising, on track for a weekly gain as Treasury yields fall

NEW YORK (Reuters) – Wall Street advanced on Friday to close a bullish week, as U.S. Treasury yields fell and economic data helped investors weather the growing possibility that the Federal Reserve will maintain its restrictive policy. in place for longer than expected.

All three US stock indices were positive, led by the technology-laden Nasdaq, which got a strong boost from market-leading, interest-rate-sensitive big caps. US Treasury yields fell in the wake of comments from Federal Reserve officials that calmed concerns about inflation and interest rates.

Throughout the week, it appears that the indices are on their way to making gains, as the S&P index suffered a three-week streak of losses, while the Dow Jones index achieved its first weekly gain since late January.

The week also saw the S&P 500 break out of its 50- and 200-day moving averages, which are two closely watched technical levels.

“You have an oversold market, that has traded down to key support levels and is above the 50-day moving average resistance level,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “It’s an indication of a shift. And a lot of people are skeptical about that, but they don’t want to be left behind.”

Economic data released on Friday showed steady demand for services, with purchasing managers’ indices (PMI) from the Institute for Supply Management and Standard & Poor’s Global indicating that activity in the sector continues to expand even as input prices fall.

“Nothing indicates that we are descending from a cliff,” Pavlik added. “The labor market remains very strong and the data this morning is pointing to a soft landing.”

At 1:56 pm ET, the Dow Jones Industrial Average (.DJI) rose 279.29 points, or 0.85%, to 33,282.86 points, the S&P 500 (.SPX) rose 51.18 points, or 1.29%, to 4,032.53 points, and the Nasdaq Composite Index (. .IXIC). ) increased by 189.80 points, equivalent to 1.66%, to 11,652.78 points.

Of the 11 major S&P 500 sectors, all but consumer goods (.SPLRCS) were in positive territory, with telecom services (.SPLRCL) and consumer appreciation (.SPLRCD) notching the largest percentage gains.

Fourth-quarter earnings season has come to a close, with all but seven companies in the S&P 500 reporting earnings. Results for the quarter beat consensus estimates 68% of the time, according to Refinitiv.

On the whole, however, analysts believe that the S&P 500’s earnings will decline 3.2% in the fourth quarter compared to a year ago, and they expect negative numbers on an annual basis for the first two quarters of 2023. This means that the S&P 500 has entered an earnings slump three quarters in the past months. The last of 2022, according to Refinitiv.

Apple (AAPL.O) jumped 2.9% after Morgan Stanley said the stock could rise more than 20% this year due to a potential hardware subscription.

Broadcom Inc (AVGO.O) advanced 5.5% after the chipmaker forecast second-quarter revenue higher than analyst estimates as increased investments in artificial intelligence fueled demand for chips.

Among the losers, Costco Wholesale Corp (COST.O) fell 2.8% in the wake of its revenue loss, as high inflation dampened consumer demand.

Chipmaker Marvell Technology Inc (MRVL.O) fell 6.3% in the wake of the company’s quarterly earnings loss and disappointing revenue forecast.

Advance issues outnumbered declining issues on the NYSE by a ratio of 4.63 to 1; On the Nasdaq, a ratio of 2.33 to 1 favored advanced traders.

The S&P 500 posted a new 52-week high and two new lows; The Nasdaq index posted 73 new highs and 49 new lows.

Reporting by Stephen Kolb. Additional reporting by Sruthi Shankar in Bengaluru. Editing by Cynthia Osterman

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