Wall Street closes subdued as investors sit, wait for inflation data
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[June 28, 2024] By
Ankika Biswas, Lisa Pauline Mattackal and Carolina Mandl
(Reuters) -U.S. stocks ended Thursday around the unchanged mark as
investors awaited fresh inflation data, with the Nasdaq able to eke out
a slight gain after data showed a continued slowdown in economic
activity, raising investors' hope for rate cuts.
"The market is in a bit of a holding pattern here for the PCE because
there hasn't been a lot of big catalysts," said Ross Mayfield,
investment strategy analyst at Baird, about the release of the monthly
personal consumption expenditures (PCE) price index - the Federal
Reserve's preferred inflation gauge - on Friday.
Data showed new orders for key U.S.-manufactured capital goods
unexpectedly fell in May, while core durable goods orders fell 0.1%
versus forecasts for a 0.2% rise, boosting investor beliefs that a
weaker economy could prompt the Federal Reserve to cut interest rates in
September.
Weekly jobless claims fell to 233,000, missing expectations of 236,000.
Further, a final print showed the U.S. economic growth increased more
than estimated in the first quarter.
Benchmark 10- and 2-year yields, which move inversely to prices, dropped
after the data showed a continued, but moderated slowdown in economic
activity, while the 7-year yields edged lower after a $44 billion
auction.
Megacap stocks, such as Alphabet and Meta Platforms, firmed as U.S.
Treasury yields slipped, up 0.83% and 1.25%. Amazon rose 2.19% after
hitting $2 trillion in market value for the first time on Wednesday.
The Dow Jones Industrial Average rose 36.53 points, or 0.09%, to
39,164.33, the S&P 500 gained 5.16 points, or 0.09%, to 5,483.06 and the
Nasdaq Composite gained 53.53 points, or 0.30%, to 17,858.68.
Market participants have highlighted concerns over the rally's
sustainability and have called out for the need to diversify portfolios
to hedge against possible sharp losses.
Meanwhile, investors have largely stuck to their view of around two rate
cuts this year, as per LSEG's FedWatch data, even though the Fed has
projected only one, and a 59.5% chance of a cut in September.
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People walk around the Financial District near the New York Stock
Exchange (NYSE) in New York, U.S., December 29, 2023.
REUTERS/Eduardo Munoz/File Photo
In a policy essay, Atlanta Fed President Raphael Bostic said
inflation "appears to be narrowing" and that should allow rates cuts
later this year, while governor Michelle Bowman reiterated that she
is still not ready to support a central bank rate cut with inflation
pressures still elevated.
"What we've been looking forward for most of the week is kind of
that preponderance of evidence to tip the scales on what is the
direction for inflation," said Rob Haworth, senior investment
strategist at U.S. Bank Wealth Management.
Micron fell 7.11% after an in-line fourth-quarter revenue forecast
disappointed investors hoping for more upside from the memory
chipmaker's performance in the artificial intelligence boom.
Nvidia was down 1.90%, continuing its recent turbulent ride.
Walgreens Boots Alliance slumped 22.16% after cutting its 2024
profit forecast and announcing plans to close more underperforming
U.S. stores.
Denim maker Levi Strauss tumbled 15.4% after falling short of
expectations for second-quarter revenue.
Advancing issues outnumbered decliners by a 1.62-to-1 ratio on the
NYSE. There were 168 new highs and 78 new lows on the NYSE.
The S&P 500 posted 9 new 52-week highs and 2 new lows while the
Nasdaq Composite recorded 41 new highs and 118 new lows.
Volume on U.S. exchanges was 9.49 billion shares, compared with the
11.74 billion average for the full session over the last 20 trading
days.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing
by Maju Samuel and Aurora Ellis)
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