Dow, S&P 500 and Nasdaq rise as Fed boosts rally

By admin On Sep 19, 2024 0

U.S. stocks rose Thursday amid growing optimism that the Federal Reserve’s massive interest rate cut will bring about a “soft landing” for the U.S. economy.

The S&P 500 (^GSPC) rose about 1.5%, while the Dow Jones Industrial Average (^IXIC) gained nearly 1%, with both trading near all-time highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 2.5%.

Stocks are on the rise as investors look more closely at the Federal Reserve’s decision to kick off its new rate cycle with a 50-basis-point cut. Following Wednesday’s policy announcement, indicators seesawed before closing lower.

Wall Street has absorbed Chairman Jerome Powell’s message that deep rate cuts in a relatively strong economy will ultimately stave off the risk of recession, and it’s a sign of faith, not panic, over current conditions.

Bank of America now thinks the Fed will cut rates by 0.75% before the end of the year, up from 0.50% it had previously forecast. By comparison, the central bank’s own “dot plot” indicates policymakers expect a reduction of half a percentage point.

Read more: What the Fed’s rate cut means for bank accounts, CDs, loans and credit cards

Rate-sensitive growth stocks rose in premarket trading, with the mega-caps of Big Tech that fueled this year’s rally gaining. Alphabet (GOOG), Microsoft (MSFT) and Meta (META) rose about 2%, while Apple (AAPL) added more than 3%. Tesla (TSLA) and Nvidia (NVDA) rose nearly 5%.

With the Fed now in the dodge, some in the market have once again turned their attention to data releases as they brace for potential volatility. A weekly report from the Labor Department on initial unemployment claims On Thursday morning, the figures for the week ending Sept. 19 stood at 219,000, the lowest level in four months, while the previous week’s total was revised up 1,000 to 231,000.

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Thursday, September 19, 2024 at 9:29 am MDT

Bank stocks rise on Fed rate cut rebound

Yahoo Finance’s David Hollerith reports:

U.S. bank shares rose on Thursday following a massive rate cut by the Federal Reserve, a sign of optimism among investors who now expect an easing of monetary policy to boost Wall Street giants and smaller regional lenders.

Goldman Sachs (GS), Capital One (COF) and Citigroup (C) each rose more than 3% Thursday morning, followed by smaller gains for Wells Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM) and Morgan Stanley (MS).

Read more here.

Bank stocks rose on Thursday following the central bank’s rate cut.
Thursday, September 19, 2024 at 9:17 am MDT

Jobless claims at four-month low, a good sign for the labor market

Investors looking for signs of a “soft landing” pointed to the latest initial unemployment claims data showing a drop to the lowest level since May.

The Labor Department’s report for the week ending Sept. 19 came in at 219,000, versus expectations of 230,000. The prior week’s total was revised up 1,000 to 231,000.

A drop in initial jobless claims indicates the labor market may be holding up better than expected.

The Federal Reserve cut interest rates by 50 basis points on Wednesday, raising questions about whether policymakers were opting for a deeper cut amid a weakening labor market.

During Wednesday’s press conference, Federal Reserve Chairman Jerome Powell noted that the unemployment rate has risen but remains relatively low at 4.2%. Powell described the economy as “basically doing well.”
Thursday, September 19, 2024 at 8:47 am MDT

Stocks near session highs as tech fuels post-rate cut rally

Stocks rose Thursday morning as the tech-heavy Nasdaq Composite (^IXIC) led the market gains following the Federal Reserve’s rate cut announcement in the previous session.

The Nasdaq gained as much as 2.7% as technology stocks, which typically benefit from a lower interest rate environment, rose.

The Dow (^DJI) rose more than 1% to hit an all-time intraday high, while the S&P 500 (^GSPC) also hit a record in early trading.

Technology stocks led market gains on Thursday.
Thursday, September 19, 2024 at 8:00 a.m. Mountain Daylight Time

Existing home sales fall in August amid lower mortgage rates

Existing home sales fell in August as home seekers stayed on the sidelines despite mortgage rates hitting their lowest level in more than a year.

Existing home sales fell 2.5% from July to a seasonally adjusted annual rate of 3.86 million, National Association of Realtors On Thursday, the lowest level since October. Economists surveyed by Bloomberg had expected existing-home sales to reach a pace of 3.9 million in August.

On an annualized basis, existing home sales fell 4.2% in August. The median home price rose 3.1% from August to $416,700, the 14th consecutive month of annual price increases.

The combination of low inventory, rising prices and elevated mortgage rates continue to weigh on sales activity, for now.

“Home sales again disappointed in August, but the recent development of lower mortgage rates coupled with rising inventory is a powerful combination that will provide the environment for sales to increase in the months ahead,” NAR Chief Economist Lawrence Yun said in a news release.

However, economists at Fannie Mae Don’t expect sales activity to improve this year despite lower mortgage rates.

“We expect existing home sales in 2024 to decline at the slowest annual pace since 1995,” they said.
Thursday, September 19, 2024 at 7:54 am MDT

Campbell’s, in its quest for growth, will face private labels and well-known rivals

Yahoo Finance’s Brooke DiPalma reports:

With products ranging from stuffing-flavored potato chips to ghost chili chicken noodle soup, companies are stepping up competition in the supermarket aisles.

While retailers like Walmart (WMT) and Target (TGT) are forging ahead with their private labels, Campbell’s (CPB) is doubling down on innovation, marketing and expanded distribution to sell its popular brands like Goldfish.

“It comes down to… creating the right value, which isn’t just about price,” CEO Mark Clouse told Yahoo Finance at Campbell’s investor day last week. “It’s about how do we add value in ways that are more differentiated and sustainable.”

Read more here.
Thursday, September 19, 2024 at 7:31 am MDT

Dow, S&P 500 hit intraday record highs as stocks rally on massive rate cut

The Dow (^DJI) and S&P 500 (^GSPC) hit record highs on Thursday as investors digested the Federal Reserve’s announcement during the previous session: a 50 basis point rate cut.

The S&P 500 rose about 1.7%, while the Dow gained more than 1%, with both hitting record highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up more than 2.3%.

The major averages fluctuated during the previous session following the Fed’s decision to cut rates.

Gold (CG=F) held near record highs. The precious metal and other commodities rose as the dollar weakened.