NEW YORK, Feb 24 — Wall Street ended a topsy-turvy yesterday in positive territory, with the S&P 500 snapping a four-session losing streak, as investors grappled with how interest rate policy might affect the US economy.
Stock markets have been volatile this year, pulling back in February after a strong January as investors tried to figure out what the US Federal Reserve will do with interest rates. Hawkish comments from policymakers have been interspersed with data pointing to a strong American economy.
Yesterday, the Labour Department said the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, reflecting tight labour market conditions.
A separate report confirmed the economy grew solidly in the fourth quarter, though rising inventory levels were responsible for much of the increase.
US gross domestic product increased 2.7 per cent in the fourth quarter, according to the government’s second estimate. Economists were forecasting a 2.9 per cent rise.
“If you’re a bull, you can pull out plenty of things that are supportive, and if you’re bear there are plenty of things to point to that are supportive,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.
“There are so many cross currents that are moving in very different directions, I think it’s very difficult to fall back on one or two things. That’s creating a lot of hand-wringing uncertainty, and we’re range-trading as a result of it.”
For part of the day, the S&P was trading below its 50-day moving average of 3,980 points, before rallying in the afternoon to finish above 4,000 points for the first time this week.
Influencing this intraday dip were large trades in short-dated derivatives that piled selling pressure on the market, according to Nomura strategist Charlie McElligott.
Helping provide confidence to buyers, Nvidia CorpNVDA.O posted positive earnings and surged 14 per cent after forecasting quarterly sales above estimates and reporting a surge in the use of its chips to power artificial intelligence services.
Other chipmakers also gained, with Broadcom Inc AVGO.O, Intel Corp INTC.O and Qualcomm Inc QCOM.O rising between 0.6 per cent and 1.8 per cent. The Philadelphia SE Semiconductor index .SOXclimbed 3.3 per cent.
The Dow Jones Industrial Average .DJI rose 108.82 points, or 0.33 per cent, to 33,153.91, the S&P 500 .SPX gained 21.27 points, or 0.53 per cent, to 4,012.32 and the Nasdaq Composite .IXIC added 83.33 points, or 0.72 per cent, to 11,590.40.
Seven of the 11 major S&P 500 sectors rose. Higher crude prices pushed energy .SPNYup 1.3 per cent, and the index halted a losing run at seven. This tied its biggest stretch of declines since an eight-session skid in March 2017.
Communication services .SPLRCL was the biggest decliner, dropping 0.7 per cent. This was its fifth straight fall, matching another five-loss streak in October. It was weighed by Netflix IncNFLX.O, which slipped 3.4 per cent on reports the streaming service was cutting subscription prices in 30 countries.
Among other stocks, eBay IncEBAY.Orecorded its biggest daily drop since September 13, sliding 5.2 per cent, after warning of dour demand in the first half.
Moderna Inc fell 6.7 per cent, to its lower close since November 3, after the vaccine maker reaffirmed its annual sales forecast of US$5 billion for its Covid-19 vaccines despite its fourth-quarter sales exceeding estimates.
However, Bumble Inc jumped 7.5 per cent. The owner of the eponymous dating app projected annual revenue growth above market estimates on optimism over rising paying users.
Volume on US exchanges was 10.43 billion shares, compared with the 11.59 billion average for the full session over the last 20 trading days.
The S&P 500 posted 7 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 59 new highs and 128 new lows. — Reuters
