US stocks rose on Thursday as investors analyzed earnings reports, economic data and minutes from the Federal Reserve’s last policy meeting for clues about the trajectory of the economy and interest rates.
The major benchmarks fluctuated between gains and losses for much of the session before closing in positive territory. The S&P 500 gained 9.70 points, or 0.2%, to 4283.74 after closing lower on Wednesday. The Dow Jones Industrial Average rose 18.72 points, or nearly 0.1%, to 33999.04. The tech-heavy Nasdaq Composite rose 27.22 points, or 0.2%, to 12965.34.
Stock indexes have risen in recent weeks on signs of easing inflation and hopes that the Fed will ease off its aggressive campaign of rate hikes. The S&P 500 is up about 17% since its mid-June low.
The rally was tempered after minutes of the July Fed meeting released on Wednesday suggested policymakers could raise rates further in a bid to curb inflation. Still, officials said they were cautious and acknowledged the risk that tightening too much could cause economic pain.
“The rather mundane nature of yesterday’s Fed minutes plays directly into the directionlessness of today’s markets,” said Eric Leve, chief investment officer at investment management firm Bailard.
Home sales data showed a further slowdown in the US housing market. Existing home sales fell for the sixth straight month in July, the National Association of Realtors reported Thursday. Higher mortgage rates weighed on sales, another example of how the Fed’s rate hikes are affecting all corners of the economy.
Meanwhile, jobless claims fell last week, according to the Labor Department, suggesting the job market is holding up despite signs of weakness in the broader economy.
“There is still a narrow path to a ‘soft landing’, but it’s becoming increasingly difficult to achieve,” said Joe Little, chief global strategist at HSBC Asset Management.
On the earnings front, shares of Kohl’s Corp. down $2.62, or 7.7%, to $31.33 after the retailer’s second-quarter earnings shrank by nearly two-thirds.
Cisco Systems Inc. shares rose $2.71, or 5.8%, to $49.37 after the network and security equipment maker posted flat quarterly sales and avoided a previously forecast decline.
With about 95% of companies in the S&P 500 reporting second-quarter results, about three-fourths beat Wall Street’s earnings expectations, according to FactSet. Index constituents are about to post earnings growth of about 6% for the second quarter.
“For the future, the outlook looks much bleaker. We will have an earnings picture that I think will continue to deteriorate. For that reason, perhaps we should approach this phase with a little more caution,” said Marco Pirondini, US equities chief and portfolio manager at wealth management firm Amundi US.
Elsewhere, shares of Bed Bath & Beyond fell $4.53, or 20%, to $18.55 after investor Ryan Cohen filed to sell his stake in the company. The sell-off comes after the stock’s recent insane gains, fueled by individual investors who rocked the stock in a way reminiscent of last year’s meme stock craze.
The yield on the benchmark 10-year Treasury bond fell to 2.879% from 2.894% on Wednesday. Bond yields and prices move in opposite directions.
In commodity markets, international oil benchmark Brent rose 3.1% to $96.59 a barrel. The prospect of weaker demand and additional supply have weighed on crude oil prices in recent weeks.
Energy stocks outperformed on Thursday as oil prices rose, and the energy sector of the S&P 500 closed up 2.5%.
Traders worked on the floor of the New York Stock Exchange on Wednesday.
Photo: BRENDAN MCDERMID/Portal
Overseas, the pancontinental Stoxx Europe 600 edged up 0.4%. In Asia, Japan’s Nikkei 225 fell 1%, Hong Kong’s Hang Seng fell 0.8% and the Shanghai Composite Index fell 0.5%.
Write to Will Horner at [email protected] and Hannah Miao at [email protected].
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