Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall Street ends up as investors eye data for rate prospects, energy outperforms

Published 12/23/2022, 06:14 AM
Updated 12/23/2022, 07:05 PM
© Reuters. Screens display the trading information for ExxonMobil on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 9, 2022.  REUTERS/Brendan McDermid

© Reuters. Screens display the trading information for ExxonMobil on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 9, 2022. REUTERS/Brendan McDermid

By Sinéad Carew and Ankika Biswas

(Reuters) - The S&P 500 closed higher on Friday, in a light trading day ahead of a long weekend, as investors assessed inflation data against rate hike and recession fears while energy shares jumped on higher oil prices.

A Commerce Department report showed U.S. consumer spending barely rose in November, while inflation cooled further, but not enough to discourage the U.S. Federal Reserve from driving interest rates to higher levels next year.

The personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, rose 0.1% last month after climbing 0.4% in October.

A benchmark survey showed U.S. consumers expect price pressures to moderate notably in the next year, with the one-year inflation outlook dropping to the lowest in 18 months in December.

Wall Street indexes had sold off sharply on Thursday after revised data had indicated a resilient American economy, fueling worries that the Federal Reserve could keep hiking rates for longer and end up pushing the economy into a recession.

But Friday's data and the fact that it came in roughly in line with expectations, eased some of those concerns for now, according to Shawn Cruz, head trading strategist at TD Ameritrade in Chicago, Illinois.

"This is a clear indication that this is a bad news is good news kind of market. The market wants the Fed to feel what they're doing has been enough," said Cruz.

"It is on edge over what the path for Fed policy is going to be for next year as that's going to drive the economy and corporate earnings."

Investors have been jittery since last week as the Fed indicated that it remains stubbornly committed to achieving the 2% inflation goal and projected rate hikes to above 5% in 2023, a level not seen since 2007.

Joe Quinlan Head of CIO Market Strategy at Merrill and Bank of America (NYSE:BAC) Private Bank also called Fed hawkishness "the big cloud on the horizon."

"Today is more of a muted response to good data but still it's not all clear, mission accomplished," he said, adding that analyst earnings estimates for 2023 are likely too high.

The Dow Jones Industrial Average rose 176.44 points, or 0.53%, to 33,203.93, the S&P 500 gained 22.43 points, or 0.59%, to 3,844.82 and the Nasdaq Composite added 21.74 points, or 0.21%, to 10,497.86.

The S&P and Nasdaq lost ground for the third week in a row, with the benchmark index falling 0.2% compared with a weekly decline of 1.9% for Nasdaq. The Dow however gained 0.9% for its first weekly increase out of three.

TD Ameritrade's Cruz also noted that thin trading volume may have created more exaggerated moves Thursday and Friday with volume dropped sharply on Friday as participants likely took time off ahead of the long weekend as U.S. markets will be closed on Monday, the day after the Christmas holiday.

On U.S. exchanges 7.75 billion shares changed hands on Friday compared with the 11.41 billion average for the last 20 sessions.

Energy shares stood out as the biggest advancers throughout the session as oil prices gained following news of Moscow's plans to cut crude output.

After spending most of the day down, even the technology and healthcare sectors, the S&P's weakest performers for the session, managed to eke out small gains with tech adding 0.08% and healthcare adding 0.12%.

Tesla (NASDAQ:TSLA) Inc's shares had touched a more than two-year low in volatile trading as boss Elon Musk's promise to not sell his shares for at least two years did not reassure investors.

Dow Jones parent News Corp (NASDAQ:NWSA) gained 2.8%, making it the second-biggest percentage gainer in the S&P Communications services index after a report that billionaire businessman Michael Bloomberg was interested in acquiring either Dow Jones or the Washington Post.

© Reuters. Screens display the trading information for ExxonMobil on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 9, 2022.  REUTERS/Brendan McDermid

Advancing issues outnumbered declining ones on the NYSE by a 2.06-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored advancers.

The S&P 500 posted 2 new 52-week highs and 1 new low; the Nasdaq Composite recorded 49 new highs and 228 new lows.

Latest comments

I want some of what Kerry Ditto is smokin lol
very soon a bot will replace your commentry, get a life
Merry Christmas plebs.
oil up
more good news for the biden administration..... unwinding the damage created by the previous president and his Administration is going to take some time.
inflation concern is pushed to back seat. now they want to concern about something else. golly. give us a break.
very slow recognition lag today on the best economic news inflation. core pce falling like a rock. Powell probably is switching from baby teddy bear to a dove now.
biden second term lock rally is about to begin.
core pce is falling like a rock. the best news of the year. rejoice.
The news presented was different from the market results 😅
Yesterday were lot of worries about recession , inflation, rising unemployment claims....And now where r these worries n fears ?Are they disappeared within 24 hours??
It’s you day traders, go long and be happy.
scam
please stop trying to find stupid reasons for market movements :)
If they listen to you, I would post so much less  ;-)
ditto....
C'mon "Investors" have absolutely no say in the direction of these markets. Its just the FED, CBs and their rigged algos
Buy stocks and be happy. Earnings will grow
Not this year. Been hiding in a cave?
Stock market is up 10% this quarter . Is your head in the sand.
Fed eill run us into a major depression. Ghey are playing with fire now.
biden is inflation , go make more bad economy things
Stock market is up 10% this quarter, except the same in 2023
You go make bad economy things.
  Look at what market did around this time in 2018  ;-)
Fed doing their job to respond to inflation caused by reckless spending and more debt by Democrat majority Congress.
@First, you forgot many illegal aliens who get paid in cash.
... These illegal aliens paid in cash do not pay income taxes and are like not counted in your statistic in this thread.
  Yes.  Legal or illegal aliens or citizens who are paid in cash may not be paying tax.  Again, did anyone say otherwise?
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.