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NEW YORK (AP) – U.S. stocks hit a record high Thursday after some mixed reports on the economy.
The S&P 500 index rose 29.11 points, or 0.6%, to 5,029.73, hitting a new all-time high set last week. The Dow Jones Industrial Average rose $348.85, or 0.9%, to $38,773.12, and the Nasdaq Composite Index rose $47.03, or 0.3%, to $15,906.17.
TripAdvisor rose 9.2% after reporting its latest quarterly results that beat analysts’ expectations. High-tech giant Cisco Systems also announced better-than-expected results, but its stock price fell 2.4% after the company lowered its full-year profit forecast.
Various economic data included reports such as: Sales at US retail stores are sluggish January was better than expected than December.U.S. household spending fell sharply, but strength helped protect the economy from recessionEven if interest rates are high. The upside for financial markets is that some upward pressure on inflation may also be relieved.
Another report says the U.S. workforce is shrinking applied for unemployment benefits Last week was better than expected, the latest sign that the job market is strong despite high-profile layoff announcements. Other reports Thursday morning painted a mixed but better picture for manufacturing than feared.
Overall, the economic report contributed to a decline in US Treasury yields in the bond market. The yield on the 10-year U.S. Treasury note fell to 4.24% from 4.27% late Wednesday.
Government bond yields have been rising sharply recently. A powerful report on ~ that exceeds expectations inflation, job market And that overall economy Forces Wall Street traders to postpone forecasts When does the Federal Reserve System start? lower interest rates.
The Fed has already raised its key interest rate to its highest level since 2001. High interest rates are expected to weigh on the economy and bring inflation down to comfortable levels without causing a recession.
While there had previously been hope that the Fed could provide some easing and potentially start cutting rates in March, Wall Street now believes that won’t happen until May or June. The delay caused stock prices to fall from all-time highs.
Still, there are still widespread expectations that interest rates will be cut before the end of the year. Only the timing has changed. Meanwhile, the economy continues to look strong, which should drive corporate profit growth. This has helped prevent stock prices from falling significantly.
CBRE Group rose 8.5%, joining the parade of companies whose profits for the final three months of 2023 beat analysts’ expectations, posting the biggest gain among the S&P 500 index. Despite the difficult situation in commercial real estate, the company also reported higher than expected revenue.
Shake Shack was another winner, rising 26% after the burger chain reported better-than-expected profits and revenue. Total revenue increased 20% year-on-year, exceeding expectations.
wells fargo rose 7.2%, becoming one of the strongest drivers of the S&P 500. Regulators at the Office of the Comptroller of the Currency have removed a consent order issued in 2016 that required banks caught opening fraudulent accounts to reconsider how they sell products to customers.
The loser on Wall Street was Deere Corp., which fell 5.2% even though the farm equipment maker’s latest quarterly profit beat expectations. Mr. Deere forecast earnings for the current fiscal year below analyst expectations, saying conditions in the industry are returning to normal after several record-breaking years.
One risk that could turn the situation upside down is the upcoming US election. Bank of America strategists led by Mark Kavanagh say the Fed doesn’t like to move from keeping rates on hold to cutting them closer to the election. Therefore, if the Fed does not act by June, it is likely to end up keeping interest rates on hold until late 2024 or early 2025.
Still, Kavanagh said where yields end up depends less on when the Fed starts cutting rates than on how far they end up cutting rates.
In overseas stock markets, the Nikkei Stock Average rose 1.2% in response to Japan’s announcement. its economy It contracted for the second consecutive quarter. The slump in the world’s fourth-largest economy after Germany has raised hopes that Japan’s central bank will keep interest rates very accommodative.
Britain also reported its economy It contracted for the second consecutive quarter. London’s FTSE 100 index rose 0.4%, and stocks rose slightly further across Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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