S&P 500 slips like hawks, labor data weighs in

  • Fed’s Bullard supports more rate hikes
  • Cisco rises after co raises full-year outlook
  • Macy’s jumps after earnings forecast
  • Indices: Dow up 0.07%, S&P down 0.23%, Nasdaq down 0.09%

Nov 17 (Reuters) – The S&P 500 fell modestly on Thursday, after aggressive comments from a US Federal Reserve official and data showing the labor market remained tight led some investors to worry about more aggressive rate hikes.

Equities fell sharply early in the session and then rallied with the Dow index rising higher, supported by a positive earnings outlook from Cisco Systems (CSCO.O).

Stocks have pulled back from a strong month-long rally in recent days after softer-than-expected inflation reports raised hopes that the Fed would dampen its rate hikes.

“Hope is an eternal leap in the stock market, and the markets have been fighting against the Fed,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in St. Louis.

“You’ve had these reversals, you’ve had these spectacular rallies. But still, if you look back at the full year of 2022, you’ve had lower highs and lower lows and there’s nothing to suggest we’ve broken that pattern.”

The Dow Jones Industrial Average (.DJI) rose 22.8 points, or 0.07%, to 33,576.63, the S&P 500 (.SPX) lost 9.27 points, or 0.23%, to 3,949.52 and the Nasdaq Composite (.IXIC) fell 9.73 points, or 0.09%, to 11,173.93.

James Bullard, president of the St. Louis Fed, said the central bank should continue to raise rates as the tightening has so far had “only limited effects on perceived inflation”.

Data showed the number of Americans filing new claims for unemployment benefits fell last week, suggesting the job market remains tight, following a Wednesday report of strong retail sales growth last month that indicated the economy has weathered rate hikes.

Traders’ bets on a 75 basis point increase at the Fed’s next meeting rose to 19% from about 15% a day earlier, according to the CME Group’s FedWatch tool, with the remaining odds of a smaller 50 basis point increase .

Cisco shares rose more than 4% after the company raised its full-year revenue and earnings forecast and eased supply chain hurdles. The stock led the heavyweight S&P 500 information technology sector (.SPLRCT) up 0.3%.

However, most S&P 500 sectors were lower, with utilities (.SPLRCU) and basic materials (.SPLRCM) both down about 1.4%.

In other company news, shares of Macy’s (MN) rose more than 14% after the department store chain raised its annual profit forecast due to resilient demand for high-end apparel and beauty products.

Falling issues outnumbered emerging issues on the NYSE by a ratio of 2.54 to 1; on Nasdaq, a ratio of 1.83 to 1 favored the fallers.

The S&P 500 made no new highs in 52 weeks and 1 new lows; the Nasdaq Composite recorded 28 new highs and 144 new lows.

Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Edited by Vinay Dwivedi, Arun Koyyur and David Gregorio

Our Standards: The Thomson Reuters Principles of Trust.

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