NEW YORK, Oct 29 — A robust, broad-based rally sent Wall Street to a sharply higher close on Friday as encouraging economic data and a sunnier earnings outlook fueled investor risk appetite ahead of next week’s much-anticipated two-day policy meeting of the Federal Reserve.
All major US indexes ended the session up about 2.5 per cent or more, with the S&P and the Nasdaq notching their second straight weekly gains. The blue-chip Dow posted its fourth consecutive Friday-to-Friday advance and its biggest weekly percentage gain since May.
“This has been one of the best months (so far) in the history of the Dow, suggesting the bear market likely ended,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “Big monthly moves historically happen at the end of bear markets.”
“This is the second Friday in a row we’ve seen aggressive buying suggesting investors are growing more comfortable holding over the weekend,” Detrick added.
A 7.6 per cent rebound in Apple IncAAPL.O helped soften the blow of the 6.8 per cent plunge for Amazon.comAMZN.O shares, in the wake of the two market leaders’ results.
Solid earnings beats from ChevronCVX.N, Exxon MobilXOM.N and other companies outside the tech and tech-adjacent megacap group have brightened aggregate earnings estimates for the quarter.
Analysts now see third-quarter S&P 500 earnings growth of 4.1 per cent, up from 2.5 per cent on Thursday, according to Refinitiv data.
“We’ve seen some high-profile misses from significant large-cap names,” Detrick said. “But under the surface many of the smaller and midsize companies have been quite impressive with their earnings results.”
On the economics front, the Commerce and Labor Departments released data that showed robust consumer spending and easing wage growth, respectively.
Financial markets have now priced in an 84.5 per cent likelihood of a fifth consecutive 75 basis point interest rate hike at the conclusion of the Fed’s Nov. 1-2 policy meeting, and a 51.4 per cent chance the central bank will decelerate to 50 basis points in December, according to CME’s FedWatch tool.
“The door is cracked open on the possibility that we might see a more dovish Fed come December’s policy meeting, whereas a month ago that door was locked and slammed shut,” Detrick added.
The Dow Jones Industrial Average .DJIrose 828.52 points, or 2.59 per cent, to 32,861.8, the S&P 500 .SPXgained 93.76 points, or 2.46 per cent, to 3,901.06 and the Nasdaq Composite .IXICadded 309.78 points, or 2.87 per cent, to 11,102.45.
Of the 11 major sectors of the S&P 500, all but consumer discretionary stocks .SPLRCD, weighed down by Amazon shares, ended the session green. Tech shares .SPLRCT enjoyed the largest percentage gain.
Third-quarter reporting season has passed the halfway point, with 263 of the companies in the S&P 500 having reported. Of those, 73 per cent have beaten consensus expectations, according to Refinitiv.
Intel Corp INTC.O jumped 10.7 per cent after cutting its spending forecast, while T-Mobile US Inc’s TMUS.Osubscriber forecast hike sent its shares up 7.4 per cent.
Twitter Inc was delisted from the New York Stock Exchange, closing the book on Tesla Inc TSLA.O chief Elon Musk’s US$44 billion (RM207.8 billion) purchase of the company.
Advancing issues outnumbered declining ones on the NYSE by a 2.87-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored advancers.
The S&P 500 posted 32 new 52-week highs and eight new lows; the Nasdaq Composite recorded 117 new highs and 115 new lows.
Volume on US exchanges was 11.26 billion shares, compared with the 11.53 billion average over the last 20 trading days. — Reuters
