NEW YORK, May 23 ― Wall Street finished mixed yesterday, with the Nasdaq helped by gains in Alphabet and Meta Platforms, while the S&P 500 ended near flat as investors refrained from big bets ahead of a fresh round of talks about raising the US debt ceiling.
US President Joe Biden and top congressional Republican Kevin McCarthy were set to meet on Monday to discuss raising the federal debt ceiling, just 10 days before the United States could face an unprecedented default.
“Investors are basically saying, 'We're giving at least a 60:40 likelihood that they will come to an agreement in time,'” said Sam Stovall, chief investment strategist at CFRA Research.
“An agreement could simply be the extension, kicking it down the road to decide on a debt ceiling when they also discuss the budgets in September.”
The S&P 500 edged up 0.02 per cent to end at 4,192.63 points.
The Nasdaq Composite Index gained 0.50 per cent at 12,720.78 points, while Dow Jones Industrial Average declined 0.42 per cent to 33,286.58 points.
Comments by St. Louis Fed President James Bullard yesterday that the Federal Reserve may still need to raise its benchmark interest rate by another half-point this year pushed up the US dollar.
Investors will look for clues on monetary policy from a slew of Fed speakers and key data points this week such as the April personal consumption expenditure (PCE) index and durable goods.
The PCE index reading, the Fed's preferred inflation gauge, is due on Friday
Technology-related stocks lifted the market, with Alphabet Inc rising 1.87 per cent and Meta Platforms Inc adding 1.1 per cent.
“As debt ceiling drama intensifies, mega-cap tech stocks have become Wall Street's new favourite defensive trade,” said Edward Moya, senior market analyst at OANDA.
Apple Inc dropped 0.55 per cent after Loop Capital downgraded the iPhone maker's stock to “hold” from “buy,” its first rating cut in five months according to Refinitiv data.
In a move perceived as ramping up US-China trade tensions, Beijing barred chipmaker Micron Technology Inc from selling memory chips to key domestic industries, sending its shares 2.85 per cent lower.
Regional banking stocks were lifted by news that PacWest Bancorp has agreed to sell a portfolio of 74 real estate construction loans to a subsidiary of Kennedy-Wilson Holdings Inc.
PacWest shares surged almost by a fifth, leading stocks of some of the other regional banks' higher.
Shares of larger lenders were subdued, with JPMorgan Chase & Co 0.8 per cent lower despite the company saying its net interest income will rise US$3 billion as interest payments increase from its purchase of failed First Republic Bank this year.
“Everyone should be prepared for rates going higher from here,” JPMorgan CEO Jamie Dimon said at the bank's investor day Monday. “Five percent's not high enough for Fed funds - I've been advising this to clients, and banks, you should be prepared for six, seven.”
Shares of Pfizer Inc surged over 5 per cent after its diabetes drug, in a mid-stage trial involving patients with type 2 diabetes, resulted in weight loss similar to that of Novo Nordisk's Ozempic, data published in a medical journal showed.
Shares of Greenhill & Co more than doubled after Mizuho Financial Group Inc will buy the US M&A advisory firm for US$550 million including debt.
Dow component Chevron dipped 1.8 per cent after the oil major said it would acquire PDC Energy Inc in an all-stock transaction for US$7.6 billion, including debt.
Advancing issues outnumbered decliners on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favoured advancers.
The S&P 500 posted 18 new 52-week highs and nine new lows; the Nasdaq Composite recorded 88 new highs and 78 new lows.
Volume on US exchanges was relatively light, with 9.6 billion shares traded, compared to an average of 10.6 billion shares over the previous 20 sessions. ― Reuters
