NEW YORK (AP) — U.S. stocks rose Thursday, paring most of this week's losses.
The S&P 500 index rose 45.81 points, or 0.9%, to 5,064.20 a day earlier, after surging after the Federal Reserve said it would likely postpone interest rate cuts but had no plans to raise them. . The weekly rate of decline was more than half.
The Dow Jones Industrial Average rose $322.37, or 0.9%, to $38,225.66, and the Nasdaq Composite Index rose $235.48, or 1.5%, to $15,840.96.
In the bond market, Treasury yields fell ahead of Friday's report from the U.S. government on the number of jobs employers added last month. It is one of the most anticipated economic reports of the month, and economists expect it to show a slowdown in employment.
Chris Larkin, managing director of trading and investments at Morgan Stanley's E-Trade, said the first three months of 2024 will see “markets hungry for data that suggests the economy is no hotter than it has been. There will be,” he said. . That would give the Fed more room to consider cutting interest rates.
Financial results reports from several major companies contributed to the market's rise. Qualcomm rose 9.7% in its latest quarter as its profit and sales beat expectations. The company also revealed its expected range for future sales and profits, with the midpoint exceeding analyst expectations.
Carvana rose 33.8%, boosted by better-than-expected sales, after the used car retailer reported results for its latest quarter that far exceeded analysts' expectations.
MGM Resorts International rose 2.8% as profits and sales also beat expectations. This is due to an increase in traffic at MGM China as COVID-19 restrictions are lifted in Macau.
Apple rose 2.2% ahead of its earnings report, which was released after Thursday's close. This is the latest report in a group of stocks known as the Magnificent Seven that drove much of the market's rally last year.
These helped offset Etsy's 15.1% decline, which was only roughly in line with analysts' earnings and revenue expectations. The report cited a “remaining challenging” environment with customers generally becoming more selective when purchasing non-essentials.
DoorDash reported worse-than-expected losses, falling 10.3%. The company, which has been increasing spending on payroll and research and development, also provided a range of expected underlying earnings trends for the quarter, with the midpoint falling short of analysts' expectations.
Peloton Interactive's early gains turned to a 2.8% decline after the company announced it would cut about 400 jobs as part of a $200 million annual cost-cutting program. The company also announced that its CEO, Barry McCarthy, will step down. The company's stock price fell to an all-time low last week.
Linde, one of the most heavily weighted stocks in the S&P 500 index, fell 5.2% despite reporting better-than-expected results for the latest quarter. The industrial gases and engineering company's revenue fell short of Wall Street expectations and also missed the midpoint of its earnings forecast range for the current quarter.
In the bond market, which has helped drive much of the recent stock market movements, yields fell in response to some economic reports.
One showed fewer U.S. workers applied for unemployment benefits last week than economists expected. This is the latest sign that the job market remains strong despite high interest rates.
Another potentially even more disappointing report suggested that growth in what U.S. workers produce per hour worked in early 2024 will be weaker than economists expected. On the other hand, indicators comparing labor costs and productivity rose more than preliminary estimates. This could put upward pressure on inflation.
The economy is in dire straits and is expected to remain strong enough not to fall into recession, but not so strong that it will worsen already stagnant inflation.
With inflation readings stubbornly high this year, Federal Reserve Chairman Jerome Powell said Wednesday that it may take “more time than previously expected” to gain enough confidence to cut interest rates on inflation. Said it was expensive.
The Fed's key interest rate remains at its highest level since 2001, and a rate cut would relieve some pressure on the economy and financial markets.
Traders entered this year expecting at least six rate cuts in 2024, but are now betting big on just one or two, if any, cuts, according to CME Group data.
The yield on the 10-year U.S. Treasury note fell to 4.58% from 4.63% late Wednesday. The yield on the two-year Treasury note, moving more in line with the Fed's expectations, fell to 4.88% from 4.97%.
In overseas stock markets, indexes were mixed in Asia and Europe. Hong Kong's Hang Seng Market rose 2.5% while other Chinese markets were closed for public holidays.
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Associated Press writers Matt Ott and Zimo Zhong contributed.
