2024-01-04 19:27:01
* Private employment figures in the United States increase in December – ADP
* Allstate and JP Morgan hit highs following broker reports
* Walgreens falls following cutting its dividend
* Mobileye tumbles following weak annual revenue forecast
* Indices: Dow up 0.37%, S&P up 0.13%, Nasdaq down 0.06%.
Jan 4 (Archyde.com) –
The S&P 500 and the Dow Jones Industrial are on track for their first positive session of 2024 on Thursday, as financial stocks and good employment statistics prompted investors to push back estimates on the start of rate cuts of interest.
The recovery in two of the main US stock indexes follows a mixed start to 2024, with the S&P 500 recording its worst two-day performance since the end of October due to profit-taking following a meteoric rise last year.
Bets that the Federal Reserve might begin cutting interest rates this year have driven much of the gains toward the end of 2023, although the final minutes of the December meeting central bank officials have not given much clue as to when easing might begin.
According to the CME Group’s FedWatch tool, there is a 66.4% chance that the central bank will cut rates by at least 25 basis points in March and almost a 93% chance that it will do so in May.
Financial stocks led gains among S&P 500 sectors with a 0.8% gain. The move was supported by Allstate, which hit an all-time high and was trading 3.4% higher following Morgan Stanley raised its rating on the insurer to “overweight.”
Other insurers also gained, with American International Group and Hartford Financial Services Group hitting their highest levels since 2008. As of midfollowingnoon, they were up 0.9% and 1.7%, respectively.
Banks have been performing strongly ahead of the start of earnings season next week. JPMorgan Chase & Co hit a record high and rose 1.2%, following BofA Global Research raised its price target. Truist Financial Corp rose 1.7% following BofA raised its rating and price target.
An ADP national employment report showed that U.S. private employers hired more workers than expected in December, underscoring continued strength in the labor market that should continue to support the economy.
The number of private jobs increased by 164,000 in December, compared to 101,000 the previous month. Official U.S. employment data is due Friday.
“Today’s numbers were a little lackluster. They weren’t likely to motivate us to cut rates tomorrow,” said Joe Saluzzi, co-managing partner of Themis Trading in Chatham, New Jersey.
“What you’re seeing is people are redefining their expectations regarding when these rate cuts will start.
A weekly report from the Labor Department showed that more Americans than expected filed state unemployment claims.
Yields on longer-term U.S. Treasuries rose following the data was released, with the yield on the benchmark 10-year bond back to near 4% by mid-followingnoon.
Investors also priced the final reading of the S&P Global composite PMI data for December at 50.9, compared to a preliminary reading of 51.0.
At 1:53 p.m. ET, the Dow Jones Industrial Average was up 140.2 points, or 0.37 percent, at 37,570.39, and the S&P 500 index was up 6 points, or 0. 13%, to 4,710.83. In contrast, the Nasdaq Composite lost 8.1 points, or 0.06%, to 14,584.14.
Despite an overall positive tone, most sectors of the S&P index fell, led by energy which fell 1.1% following a massive build-up in U.S. fuel stocks sent prices lower. crude price.
Shares of Apple fell 0.8% following brokerage Piper Sandler downgraded the iPhone maker’s rating to “neutral”, days following Barclays also downgraded its rating.
Dow Jones component Merck rose 2.2% following TD Cowen raised its rating on the drugmaker to “outperform” due to growth prospects.
Mobileye Global fell 26% following forecasting preliminary fiscal 2024 revenue below estimates, while Walgreens Boots Alliance lost 6.6% following the U.S. drugstore chain nearly halved its dividend . (Reporting by Johann M Cherian and Shristi Achar A in Bengaluru and David French in New York; Editing by Devika Syamnath and Richard Chang)
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