S&P 500 posts record high close as Oracle jumps, traders keep rate-cut
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[March 13, 2024] By
Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks ended sharply higher on Tuesday, with
the S&P 500 registering a record high close as Oracle shares surged and
consumer price data failed to dampen investors' hopes of interest rate
cuts in the coming months.
Shares of Oracle jumped 11.7% and reached a record high, a day after it
reported upbeat quarterly results and said it is set to make a joint
announcement with artificial intelligence chip giant Nvidia.
Nvidia shares gained 7.2% and an index of semiconductors rose 2.1% and
snapped a two-day losing streak.
The Labor Department reported that the Consumer Price Index (CPI) rose
0.4% last month after climbing 0.3% in January. Excluding volatile food
and energy components, consumer prices increased 0.4% in February after
rising by the same margin in January.
"Investors have gotten comfortable with the notion that it's not about
when the Fed will lower rates but rather by how much, and a delay -
whether it happens in May like many were initially hoping or in
September - ultimately doesn't matter," said Oliver Pursche, senior vice
president and advisor for Wealthspire Advisors in Westport, Connecticut.
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"It's that they will and that a less restrictive environment is coming."
Traders now see a 70% chance of the first rate cut coming in June, the
CME FedWatch Tool showed, versus 71% ahead of the inflation report.
The Dow Jones Industrial Average rose 235.74 points, or 0.61%, to
39,005.4. The S&P 500 gained 57.3 points, or 1.12%, at 5,175.24 and the
Nasdaq Composite added 246.36 points, or 1.54%, at 16,265.64.
"If you look at economic data, it continues to be pretty strong,"
Pursche added. "And from my perspective as a consumer, employee and
investor, I'd rather have a strong economy and slightly elevated
interest rates than a weak economy that requires stimulus."
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A trader works on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid
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Producer price data is due later this week.
On the downside, shares of Boeing fell 4.3%. Boeing told employees
in a memo on Tuesday it is adding weekly compliance checks for every
737 factory work area and additional audits of equipment to reduce
quality problems.
The U.S. Federal Aviation Administration has curbed Boeing
production following the mid-air panel blowout on a new Alaska
Airlines <ALK.N> 737 MAX 9 jet on Jan. 5.
Also, U.S. carriers warned that their plans to increase capacity
were in doubt due to jet delivery delays from Boeing.
Shares of Southwest Airlines were down 14.9%.
Volume on U.S. exchanges was 10.97 billion shares, compared with the
12.07 billion average for the full session over the last 20 trading
days.
Advancing issues outnumbered decliners on the NYSE by a 1.28-to-1
ratio; on Nasdaq, a 1.20-to-1 ratio favored decliners.
The S&P 500 posted 48 new 52-week highs and no new lows; the Nasdaq
Composite recorded 59 new highs and 118 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Bansari
Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Rashmi
Aich, Pooja Desai and Richard Chang)
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