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Wall Street surges to sharply higher close ahead of Fed week

Economy Oct 28, 2022 07:58PM ET
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2/2 © Reuters. FILE PHOTO: Amazon logo is seen in front of a decreasing stock graph in this illustration taken April 29, 2022. REUTERS/Dado Ruvic/Illustration 2/2
 
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By Stephen Culp

NEW YORK (Reuters) - A robust, broad-based rally sent Wall Street to a sharply higher close on Friday as encouraging economic data and a sunnier earnings outlook fueled investor risk appetite ahead of next week's much-anticipated two-day policy meeting of the Federal Reserve.

All major U.S. indexes ended the session up about 2.5% or more, with the S&P and the Nasdaq notching their second straight weekly gains. The blue-chip Dow posted its fourth consecutive Friday-to-Friday advance and its biggest weekly percentage gain since May.

"This has been one of the best months (so far) in the history of the Dow, suggesting the bear market likely ended," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "Big monthly moves historically happen at the end of bear markets."

"This is the second Friday in a row we’ve seen aggressive buying suggesting investors are growing more comfortable holding over the weekend," Detrick added.

A 7.6% rebound in Apple Inc (NASDAQ:AAPL) helped soften the blow of the 6.8% plunge for Amazon.com (NASDAQ:AMZN) shares, in the wake of the two market leaders' results.

Solid earnings beats from Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM) and other companies outside the tech and tech-adjacent megacap group have brightened aggregate earnings estimates for the quarter.

Analysts now see third-quarter S&P 500 earnings growth of 4.1%, up from 2.5% on Thursday, according to Refinitiv data.

"We’ve seen some high-profile misses from significant large-cap names," Detrick said. "But under the surface many of the smaller and midsize companies have been quite impressive with their earnings results."

On the economics front, the Commerce and Labor Departments released data that showed robust consumer spending and easing wage growth, respectively.

Financial markets have now priced in an 84.5% likelihood of a fifth consecutive 75 basis point interest rate hike at the conclusion of the Fed's Nov. 1-2 policy meeting, and a 51.4% chance the central bank will decelerate to 50 basis points in December, according to CME's FedWatch tool.

"The door is cracked open on the possibility that we might see a more dovish Fed come December’s policy meeting, whereas a month ago that door was locked and slammed shut," Detrick added.

The Dow Jones Industrial Average rose 828.52 points, or 2.59%, to 32,861.8, the S&P 500 gained 93.76 points, or 2.46%, to 3,901.06 and the Nasdaq Composite added 309.78 points, or 2.87%, to 11,102.45.

Of the 11 major sectors of the S&P 500, all but consumer discretionary stocks, weighed down by Amazon shares, ended the session green. Tech shares enjoyed the largest percentage gain.

Third-quarter reporting season has passed the halfway point, with 263 of the companies in the S&P 500 having reported. Of those, 73% have beaten consensus expectations, according to Refinitiv.

Intel Corp (NASDAQ:INTC) jumped 10.7% after cutting its spending forecast, while T-Mobile US (NASDAQ:TMUS) Inc's subscriber forecast hike sent its shares up 7.4%.

Twitter Inc (NYSE:TWTR) was delisted from the New York Stock Exchange, closing the book on Tesla (NASDAQ:TSLA) Inc chief Elon Musk's $44 billion purchase of the company.

Advancing issues outnumbered declining ones on the NYSE by a 2.87-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored advancers.

The S&P 500 posted 32 new 52-week highs and eight new lows; the Nasdaq Composite recorded 117 new highs and 115 new lows.

Volume on U.S. exchanges was 11.26 billion shares, compared with the 11.53 billion average over the last 20 trading days.

Wall Street surges to sharply higher close ahead of Fed week
 

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Comments (58)
Larry Deangelis
Larry Deangelis Oct 29, 2022 8:44AM ET
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They need to rename the U.S. market to " The Apple Stock Market" . You talk about a narrow market. 1 stock holding the hold thing up.
Kerry Ditto
Kerry Ditto Oct 29, 2022 3:07AM ET
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crypto is sideways
Dave Jones
Dave Jones Oct 29, 2022 3:02AM ET
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What planet is this reporter on?
perplexed76 .
perplexed76 . Oct 29, 2022 1:08AM ET
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like they putting some pressure on FED or what? )))) Make it 5%, Jerome, to kick these parasites' butts
Tilak Mundu
tluck Oct 29, 2022 1:07AM ET
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Market rallied as if there is no inflation and FED is going to decrease interest rates
tiago quental
tiago quental Oct 29, 2022 12:39AM ET
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I like the 3.000 spam comments in https://investing.com comments.. it really makes me fell that this app/site is very professional
perplexed76 .
perplexed76 . Oct 29, 2022 12:39AM ET
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send reports
syafizi sazali
syafizi sazali Oct 28, 2022 10:36PM ET
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sharp rallies are part and parcel of bear market behavior
Nasser Hefny
Nasser Hefny Oct 28, 2022 5:06PM ET
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You can't fight stubborn inflation by incremental increases in interest rate. Sooner or later the FED will realize that. THER NO SUCH THING CALLED SOFTLANDING.
Ronald Warren
Ronald Warren Oct 28, 2022 5:06PM ET
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Rate increases are almost over. The federal government will go bust paying interest on the debt if rates don't ease. By next summer, new costs locked in and you will be back to 2%.
Chad Richer Than You
Chad Richer Than You Oct 28, 2022 4:52PM ET
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As the last short standing sells wife 👉👌
Kerry Ditto
Kerry Ditto Oct 28, 2022 4:41PM ET
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Fed has to jack up +1% at minimum, possibly +1.50% next week.
 
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