Modest gain breaks 3-day losing streak for S&P 500 Index
Major US stock indices closed largely higher on Thursday, ending a three-day losing streak for the S&P 500 despite another choppy trading day.
The benchmark index rose 0.3% after declining 0.5% at the start. He is still on track for a 0.6% weekly loss. The Dow Jones Industrial Average finished flat, while the Nasdaq rose 0.7%.
Most of the 11 sectors of the S&P 500 rose, with technology and communications accounting for a significant portion of the gains. A mix of businesses that rely on consumer spending has also helped lift the market. Financial and energy companies have fallen.
Investors were keeping their eyes on corporate results and inflation data. They also had more information on the Federal Reserve’s next policy steps after the central bank released the minutes of its policymakers meeting last month.
The minutes, which revealed that Fed officials were discussing how the central bank could start cutting back on the unprecedented financial support it has started giving to the economy since the early days of the pandemic, said maybe helped give the market a boost after its disappointing start, said JJ Kinahan, chief strategist at TD Ameritrade.
“You’re starting to have a framework for how they’re going to go about it, and the market is really in desperate need of clarity,” he said. “At least we’re starting to see the game plan.”
Fed officials agreed at their last meeting that if the economy continues to improve, they could start cutting their monthly bond purchases as early as next month and end them by mid-2022.
The S&P 500 gained 13.15 points to 4,363.80. The Dow Jones slipped 0.53 points, or less than 0.1%, to 34,377.81. The tech-rich Nasdaq gained 105.71 points to 14,571.64.
Small business shares also rose. The Russell 2000 Index added 7.70 points, or 0.3%, to 2,241.97.
Banks were among the heaviest in the market. JPMorgan Chase fell 2.6% after its latest results showed the bank was struggling to increase revenue with interest rates near zero. Falling bond yields have also weighed on the sector, which relies on higher yields to charge more lucrative interest on loans. American Express fell 3.5% and Capital One Financial fell 3.3%.
The 10-year Treasury yield fell to 1.54% from 1.58% on Tuesday night.
Delta Air Lines slipped 5.8% for the biggest decline in the S&P 500 after warning investors that rising fuel prices would test its ability to remain profitable. It also provides for higher labor costs. United Airlines fell 3.9% and American Airlines slipped 3.3%.
“Crude oil will continue to weigh on the transportation sector, especially airlines,” Kinahan said.
Much of the latest inflation update came on the heels. Consumer prices rose 5.4% in September from a year ago, matching the highest rate since 2008. The figure is slightly higher than economists’ expectations. A wide range of businesses have faced supply chain disruptions and delays amid increasing demand for goods, and many have warned that this will increase costs and reduce their bottom line.
“There is a lot of nervousness and anxiety about inflation right now,” said Kristina Hooper, chief global markets strategist at Invesco. “We’re going to see a lot of volatility and leadership changes; this is only part of the transition period we find ourselves in.”
Many companies have increased their prices to compensate for the rising costs of shipping and raw materials. Analysts fear higher prices will dampen consumer spending, the main engine of economic growth. The latest report from the Ministry of Labor showed that the costs of new cars, food, gas and restaurant meals all jumped in September.
Investors will get more data on consumer spending on Friday when the Commerce Department releases retail sales for September.
Other major banks are expected to release their results this week. Bank of America, Wells Fargo and Citigroup will follow with their latest quarterly results on Thursday. Reports on corporate earnings will rise after this week and analysts have said this could help show investors a clearer path forward in what has been a turbulent market.