Indexes end higher in volatile trade as investors assess Powell speech
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[August 26, 2023] By
Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks ended a volatile session higher on
Friday as investors digested comments from Federal Reserve Chair Jerome
Powell that the U.S. central bank may need to raise interest rates
further to ensure inflation is contained.
Powell also acknowledged that price pressures have eased in his
much-anticipated morning speech at the Economic Policy Symposium at
Jackson Hole, Wyoming.
The major U.S. indexes, which started the day with solid gains,
alternated between extending and paring those gains for much of the
session.
Powell "is demonstrating that he is pleased with how far monetary policy
has come and how inflation has been reduced. But he is still holding on
tightly to this notion that they are watching it carefully and they
still have work to do," said Michael Arone, chief investment strategist
at State Street Global Advisors in Boston.
All of the major S&P 500 sectors rose, with consumer discretionary,
technology and energy among the top gainers.
The Dow Jones Industrial Average rose 247.48 points, or 0.73%, to
34,346.9, the S&P 500 gained 29.4 points, or 0.67%, to 4,405.71 and the
Nasdaq Composite added 126.67 points, or 0.94%, to 13,590.65.
The S&P 500 and Nasdaq also ended higher for the week, with the Nasdaq
rising about 2.3% and ending a three-week streak of losses. The market
rose in the run up to Nvidia's second-quarter results Wednesday.
The company, which makes chips designed for artificial intelligence
tasks, gave another upbeat forecast with its report.
Following Powell's comments Friday, expectations of a rate hike in
November rose from a day earlier, according to CME Group's FedWatch
tool. Most traders still expect the Fed to hold off on hiking in
September.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023.
REUTERS/Brendan McDermid/File Photo
In the retailers' space, shares of Gap rose 7.2% after the company
beat second-quarter profit estimates, while Nordstrom fell 7.7%
after the department store chain left its forecasts unchanged.
Shares of Hostess Brands ended up 21.7%, jumping after Reuters
reported, citing people familiar with the matter, that the maker of
Twinkies snacks is exploring a sale. Shares of Marvell Technology
fell 6.6% after the chipmaker posted a fall in second-quarter
revenue. Hawaiian Electric Industries, which has come under scrutiny
over its possible role in the Hawaii wildfires, dropped 18.5% after
the county of Maui sued the power company.
Volume on U.S. exchanges was 9.15 billion shares, compared with the
10.82 billion average for the full session over the last 20 trading
days.
Advancing issues outnumbered declining ones on the NYSE by a
1.51-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored advancers.
The S&P 500 posted 6 new 52-week highs and 7 new lows; the Nasdaq
Composite recorded 23 new highs and 202 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Amruta
Khandekar and Shristi Achar A and Lewis Krauskopf; Editing by
Shinjini Ganguli and Deepa Babington)
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