U.S. stocks rise ahead of Fed minutes

U.S. stock indexes opened higher on Wednesday, as investors digested a batch of economic data and await the latest minutes of the Federal Open Market Committee meeting, ahead of the Thanksgiving holiday.

How are stock indexes trading?
  • The Dow Jones Industrial Average

     rose 136 points, or 0.4% to 34,233

  • The S&P 500

     gained 18 points, or 0.5% to 4,022

  • The Nasdaq Composite

    added 83 points, or 0.7%, to 11,260

Stocks finished higher on Tuesday, with the S&P 500 closing up 53.64 points, or 1.4%, to 4,003.58, the Dow industrials gaining 397.82 points, or 1.2%, to close at 34,098.10. The Nasdaq Composite advanced 149.89 points, or 1.4%, to close at 11,174.40.

What’s driving markets?

In likely holiday-thinned trade, markets may struggle to follow up on Tuesday’s gains, which were in part driven by ongoing hopes that the Federal Reserve will slow the pace at which it is raising interest rates.

November’s meeting minutes, due at 2 p.m. Eastern, will be watched closely for clues as to how high the fed-funds rate needs to go and how long it will stay there in order to bring inflation under control. The Fed hiked its benchmark rate by 0.75 percentage points to a range of 3.75% to 4% at the last meeting.

“Investors may be on the hunt for clues that they’ve acted prematurely, or that there’s actually more support for such a slowdown in tightening and less for a higher terminal rate than they previously thought,” said Craig Erlam, senior market analyst at OANDA, in a note to clients.

Erlam said the potential for answers to those questions is likely “creating the paralysis in the markets this morning.” 

Read: This isn’t a ‘close your eyes and buy anything’ kind of market

Elsewhere, Kansas City Federal Reserve President Esther George said late Tuesday that significant household savings could heighten the need to keep interest rates elevated and consumer spending under control. She reportedly made the comments in a panel hosted by the Central Bank of Chile in Santiago on Tuesday, according to Bloomberg.

In U.S. economic data, U.S. durable-goods orders rose 1% in October while jobless benefit claims rose 17,000 to 240,000 in latest week, the highest level since August. Meanwhile, the S&P Global flash U.S. services purchasing managers indexes in November dropped to 46.1 from 47.8. S&P Global flash U.S. manufacturing purchasing managers indexes in November fell to 47.6 from 50.7.

The University of Michigan’s final November consumer sentiment index and five-year inflation expectations are due at 10 a.m. Eastern, alongside October new home sales.

U.S. stock exchanges will be closed for Thanksgiving Day on Thursday, Nov. 24, and reopen the next day only for a shortened session on Black Friday, the annual end-of-year shopping event, with trading ending at 1 p.m. Eastern on Nov. 25.

Bond yields were holding steady, with that of the 10-year Treasury note

trading around 3.783% and the 2-year

at 4.521%.

The spread between 2- and 10-year Treasury yields ended Tuesday’s session at minus 76 basis points, the most inverted since Oct. 5, 1981, which some say points to an inevitable recession.

Elsewhere, oil prices

were modestly lower, while natural-gas futures

climbed 9% to $8.095 per million British thermal units, with European natural-gas futures also surging after Russian energy giant Gazprom threatened to cut deliveries through a Ukraine pipeline to Europe. Markets are also waiting on news of an agreement between the U.S. and its allies over a price cap on Russian oil.

Companies in focus
  • Manchester United’s 

    stock climbed 12.7% on Wednesday after the club’s owners confirmed they are exploring potential financial investment or an outright sale of the storied Premier League club.

  • HP Inc.

    shares went up 1.3% on Wednesday after the company’s executives on Tuesday announced plans to cut up to 10% of their workforce in the coming years while issuing weaker-than-expected earnings guidance.

  • Credit Suisse

    shares went down 4.2% Wednesday after the bank’s shareholders overwhelmingly approved a plan to raise 4 billion francs ($4.2 billion) on Wednesday. In two votes, shareholders backed a plan for a private placement as well as a rights offering of discounted shares. 

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