US Stocks Snap 3-Day Losing Streak 12/07 15:33
Wall Street rose Thursday to snap its first three-day losing streak since
NEW YORK (AP) -- Wall Street rose Thursday to snap its first three-day
losing streak since Halloween.
The S&P 500 climbed 36.25 points, or 0.8%, to 4,585.59. The Dow Jones
Industrial Average added 62.95, or 0.2%, to 36,117.38, and the Nasdaq composite
jumped 193.28, or 1.4%, to 14,339.99.
Big Tech stocks helped power the market higher, led by a 5.3% leap for
Google's parent company, Alphabet. They're Wall Street's most influential
stocks because of their massive size, and they have been on huge tears so far
Cerevel Therapeutics also jumped 11.4% after AbbVie announced an $8.7
billion deal to buy the company and its pipeline of candidates for
schizophrenia, Parkinson's and other diseases. AbbVie added 1.1%.
Wall Street has rallied toward its best level since March 2022 largely on
hopes that the Federal Reserve is finally done with its barrage of hikes to
interest rates, which are meant to get high inflation under control. That has
anticipation high ahead of a report on Friday, the U.S. government's latest
monthly update on the job market.
The Federal Reserve wants to see the job market slow by just the right
amount. Too much weakness would mean people out of work and a possible
recession, but too much strength could add upward pressure on inflation.
So far, anticipation is rising that the Federal Reserve can nail a perfect
landing for the job market and overall economy. Inflation has been slowing
since peaking two summers ago, and expectations are building that the Fed's
next move will be to cut interest rates next year.
A report on Thursday said that slightly more U.S workers applied for
unemployment benefits last week, though the number is not alarmingly high and
hit economists' expectations exactly. That had both stock and bond markets
relatively calm and waiting for Friday's report, which could be more impactful.
The yield on the 10-year Treasury rose to 4.14% from 4.12% late Wednesday.
It's been generally easing since topping 5% in October and hitting its highest
level since 2007.
The drop in the 10-year yield over the last month, including after
accounting for inflation, is one of the reasons strategists at Goldman Sachs
say the S&P 500 looks like it's trading "roughly in line with fair value," even
after its nearly 9% rip higher through November. Expectations for a healthy
economy have also helped boost stocks.
But the path ahead could travel down one of several forks, depending in part
on how quickly inflation cools and whether the Fed does cut rates by as much as
traders are expecting. Goldman Sachs says traders "are approaching the limits
of what could plausibly" be expected for rate cuts without a recession hitting
in the near term.
"We believe much of the optimistic scenario is already reflected in US
equity prices today," the strategists led by Ryan Hammond wrote in a report.
Since the Federal Reserve began its campaign early last year to drastically
ramp up interest rates, traders have several times built up bets for an
imminent halt to rate hikes and for potential cuts, only to be disappointed
each time. While Federal Reserve officials have hinted recently their main
interest rate may indeed be at a peak, some have said it's too early to begin
considering when cuts could come.
Hopes for easier rates help all kinds of investments, particularly those
seen as the most expensive or promising big growth the furthest in the future.
That's helped send Big Tech stocks to their huge gains this year.
Alphabet's jump on Thursday brought its gain for the year so far to just
over 55%. A day earlier, it announced the launch of its Gemini artificial
intelligence model. The announcement made few waves on Wall Street initially,
and Alphabet's stock slipped Wednesday, but analysts at JPMorgan said in a
report they "are encouraged to see Google's progress on this major technology
Alphabet was the single strongest force pushing the S&P 500 upward, but
Apple, Amazon and Nvidia all also rose at least 1%.
Another winner was JetBlue Airways, which climbed 15.2% after it said it may
report better results for the final three months of the year than it earlier
expected. It also slightly lowered the top end of its forecast for fuel costs
during the end of 2023.
Crude oil prices have been falling recently amid worries about demand from
the global economy falling short of available supplies. The price for a barrel
of benchmark U.S. crude slipped another 4 cents to settle at $69.34. It was
above $93 in late September.
Brent crude, the international standard, fell 25 cents to $74.05 per barrel.
On the losing end of Wall Street, C3.ai tumbled 10.8% after reporting weaker
revenue for the latest quarter than analysts expected.
In stock markets abroad, the Nikkei 225 dropped 1.8% in Tokyo amid
speculation about whether the Bank of Japan will ease off its ultra-easy policy
on interest rates.
Losses for stock indexes elsewhere in Asia and Europe were more modest.