S&P 500 ends higher after strong retail sales data
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[February 16, 2023] By
Johann M Cherian and Noel Randewich
(Reuters) - The S&P 500 ended higher on Wednesday after
stronger-than-expected retail sales data offered evidence of resilience
in the U.S. economy, but gains were capped as investors worried about
more interest rate hikes by Federal Reserve in the months ahead.
A Commerce Department report showed retail sales surged 3% in January as
purchases of motor vehicles and other goods pushed the number well past
the 1.8% estimate from economists polled by Reuters.
On Tuesday, data showed U.S. consumer prices accelerated in January,
boosting expectations that the Fed will raise the policy rate at least
twice more this year to the 5-5.25% range.
"The good news from retail, and broadly from the stronger economy, has
been mostly priced in," said Ross Mayfield, an investment strategist at
Baird in Louisville, Kentucky. "At the same time, that strength has
taken market expectations of rate cuts off the table and moved the
terminal Fed funds rate a little bit higher."
Fueled by a rebound in growth stocks that were hammered in last year's
stock market downturn, the S&P 500 .SPX has climbed 8% so far in 2023,
while the Nasdaq .IXIC has recovered 15%. A better-than-expected
quarterly earnings season has provided cautious optimism.
More than half of all S&P 500 companies have reported quarterly
earnings, and nearly 70% of those have topped profit expectations,
according to I/B/E/S data from Refinitiv. That compares to a long-term
average of 66%.
Apple AAPL.O, Alphabet GOOGL.O, Amazon AMZN.O and Tesla TSLA.O rose
between 1.4% and 2.4%, driving gains in the S&P 500 and Nasdaq.
The S&P 500 climbed 0.28% to end the session at 4,147.61 points.
The Nasdaq gained 0.92% to 12,070.59 points, while Dow
Jones Industrial Average rose 0.11% to 34,128.05 points.
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A trader works on the trading floor at
the New York Stock Exchange (NYSE) in New York City, U.S., January
27, 2023. REUTERS/Andrew Kelly
Nine of the 11 S&P 500 sector indexes rose, led by a
1.2% gain in consumer discretionary .SPLRC.
Roblox RBLX.N soared 26% after the gaming platform popular with kids
topped quarterly bookings estimates.
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co (TSMC)
fell 5.3% after Warren Buffett's Berkshire Hathaway Inc BRKa.N
slashed its stake in the chipmaker.
Shares of Airbnb Inc ABNB.O rose over 13% after the company posted
forecast-beating results due to strong travel demand.
Devon Energy DVN.N slumped about 10% after the shale oil producer
missed expectations for quarterly profit due to a hit to production
from severe cold weather in the United States and higher expenses.
After the bell, Roku ROKU.O surged 14% following a revenue forecast
that beat analysts' expectations.
Across the U.S. stock market .AD.US, advancing stocks outnumbered
falling ones by a 1.4-to-one ratio.
The S&P 500 posted 19 new highs and no new lows; the Nasdaq recorded
84 new highs and 55 new lows.
Volume on U.S. exchanges was relatively light, with 10.5 billion
shares traded, compared to an average of 11.8 billion shares over
the previous 20 sessions.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru and
by Noel Randewich in Oakland, Calif., additional reporting by
Shristi Achar A; Editing by Savio D'Souza, Anil D'Silva and David
Gregorio)
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