Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Wall Street ends higher as retail sales slump feeds hopes for rate cuts

Published 02/15/2024, 06:35 AM
Updated 02/15/2024, 07:16 PM
© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 14, 2024.  REUTERS/Brendan McDermid

By Carolina Mandl, Johann M Cherian and Ankika Biswas

(Reuters) -U.S. stocks closed higher on Thursday as retail sales data declined more than expected, feeding hopes the Federal Reserve will soon start cutting interest rates in coming months.

A Commerce Department report showed U.S. retail sales dropped 0.8% in January, weighed by declines at auto dealerships and gasoline service stations.

The data had investors less stressed about hotter than expected inflation data that had sent stocks lower on Tuesday.

"Investors are cheering the fact that we got a weaker-than-anticipated retail report," said Neville Javeri, a portfolio manager at Allspring Global Investments. "Maybe the consumer is slowing, maybe this negates the higher CPI number we saw a couple of days ago."

"It shows that maybe the economy might be a little weak and so that's a sort of a bad news that is potentially good news because it means the Fed is more likely to cut rates," said Thomas Martin, senior portfolio manager at GLOBALT.

Bets for a rate cut of at least 25 basis points in May edged up to 40%, while the odds for June stood at roughly 79%, according to the CME Group's (NASDAQ:CME) FedWatch Tool.

A Labor Department report showed initial claims for state unemployment benefits stood at 212,000 for the week ended Feb. 10, lower than the estimated 220,000.

On Friday, a producer price index (PPI) report will provide more clues about the economy.

The S&P 500 gained 29.05 points, or 0.58%, to end at 5,029.67 points, while the Nasdaq Composite gained 47.03 points, or 0.30%, to 15,906.17. The Dow Jones Industrial Average rose 350.07 points, or 0.91%, to 38,774.73.

Alphabet (NASDAQ:GOOGL) dropped 2.17% after investment firm Third Point dissolved its stake in the megacap.

Apple shares (NASDAQ:AAPL) were pressured as Warren Buffett's Berkshire Hathaway (NYSE:BRKa) BRKa.N trimmed its large stake in the iPhone-maker and Soros Fund Management entirely dissolved its stake. But the stock bounced in late trading and closed down just 0.1%.

Investor optimism grew as 80.3% of S&P 500 companies have now beaten earnings expectations, LSEG data showed, surpassing the annual 76% average.

CBRE Group (NYSE:CBRE) soared 8.5% after forecasting annual profit largely above estimates, driving a rise in the S&P 500 real estate sector.

Wells Fargo jumped 7.2% after the bank said the U.S. Office of the Comptroller of the Currency has terminated a 2016 consent order over the bank's sales practices misconduct.

Recently underperforming sectors such as utilities, materials and energy notched strong gains. The small-cap Russell 2000 Index also advanced 2.3%.

Cisco Systems (NASDAQ:CSCO) fell 2.43% as it announced plans to cut 5% of its global workforce and lowered its annual revenue target.

Deere (NYSE:DE) & Co, the world's largest farm-equipment maker, lost 5.2% after cutting its 2024 profit forecast. West Pharmaceutical Services (N:WST) tumbled 14.1% after forecasting full-year results below estimates.

© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 14, 2024.  REUTERS/Brendan McDermid

Advancing issues outnumbered decliners by a 5.3-to-1 ratio on the NYSE, while on Nasdaq advancing issues outnumbered decliners by a 2.4-to-1 ratio.

On U.S. exchanges 12.24 billion shares changed hands compared with the 11.7 billion moving average for the last 20 sessions.

Latest comments

Sick of this kind of headline just merely hoping for a pump
Okay, so here is what I take from the headline. Retail sales slumped. Equity closed higher. These two are facts folks. What is not? This happened BECAUSE this. Thats speculation and not news but we all pretend we know every moves in the 5 minute chart.
what does 'feeds hopes' mean? It means the wall street ended higher 'because' the rate cuts hopes increased 'because' of the slump in retail sales. It pretty evident and basic inference.
Headline reads "Wall Street ends higher as ...".   "as" also in 1st sentence.  "as" means correlation, not causation.  Article does say retail sales slump feeds, or causes, hopes for rate cuts, but does NOT say anything about what causes stock market to be up.
@Sym: You are right. Financial reporting is infested with so called journalists who appear to find this kind of fantastical manufacturing of explanations without any substance to be perfectly acceptable. It's awful and they don't get just how much it diminishes their credibility in the eyes of the reader she they do it.
Headlines are a joke
I get a great laugh. I can't believe what news have become in my small lifetime of 35 years.
Well that didn't take long. They're already pumping the early Fed rate scheme again.
so now a recession is now bullish because at least we'll get rate cuts. gotcha
Soft landing, not recession
funny but Citi chief economist don't think so
Empire Destoyer, of course citi is buying.
Nasdaq is only down a droplet. Tech bubble fearless. LOL
when retail sales plummet to zero, the stock market will go to the moon and be euphoric welcome to Orwell's 1984
me ish, why the rediculious statements.
Whichever direction the retail sales data the deceptive analysts will manipulate it as bullish good news
So why ever be bearish?
there are times when the market IS bearish. The markets always gives people that understand the signals, time to get out.
right now the market is signaling its NOT the time to get out.
Of course retail sales slipped in January lol Christmas was in December
and dum investors can look all they like for an interest rate cut - they could be looking a long time! higher for longer is just what the FED and their WEF backers want - to destroy the entire global economy
In the reports released in Februaries of 2020-2023, U.S. Retail Sales MoM were up.
Dude they revised Dec lower too...
Soros just bought a huge position of JBLU. He knows Icahn is a genius. It is a $10 stock. Semper Fi
I would not buy anything with Soros attached to it! Probably anti American
 Biden and WEF backers are Anti American - there's been a government coup by the military industrial complex - now the Deep state is against the American people - wake up
lol twice.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.