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Wall Street ends mixed; Salesforce sell-off pressures Dow

  • Salesforce falls on exit plan for co-CEO
  • Dollar General falls short of cutting annual profits
  • US output shrinks for the first time in 2-1/2 years in November
  • Indices close: S&P 500 -0.08%, Nasdaq +0.13%, Dow -0.56%

Dec 1 (Reuters) – Wall Street ended mixed on Thursday as a selloff in Salesforce weighed on the Dow, while traders digested U.S. data that suggested the Federal Reserve’s rate hikes are working.

On Wednesday, the S&P 500 rose more than 3% on optimism that the Fed may moderate its rate hike campaign.

U.S. manufacturing activity shrank in November for the first time in 2-1/2 years as higher borrowing costs weighed on demand for goods, data showed, evidence that the Fed’s rate hikes have cooled the economy.

The personal consumption goods (PCE) price index rose 0.3%, the same as in September, and in the 12 months to October the index rose 6.0% after rising 6.3% the previous month.

Excluding the volatile food and energy components, the PCE price index rose 0.2%, a tenth less than expected, after rising 0.5% in September.

“On a normal day, the package of data this morning would be quite risky, but after yesterday’s rally, I don’t think it’s quite good enough to push another leg higher,” said Ross Mayfield, an investment strategy analyst at Baird. Wednesday’s rally pushed the S&P 500 (.SPX) above its 200-day moving average for the first time since April after Fed Chairman Jerome Powell said it was time to slow the pace of rate hikes.

Traders now see a 79% chance that the Fed will raise its benchmark interest rate by 50 basis points in December and a 21% chance that it will raise interest rates by 75 basis points.

Salesforce Inc ( CRM.N ) fell 8.3% after the software maker said Bret Taylor would step down as co-chief executive officer in January.

Dollar General Corp ( DG.N ) fell 7.5% after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp ( COST.O ) fell 6.6% after the membership retailer reported lower sales growth in November.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 29, 2022. REUTERS/Brendan McDermid

The S&P 500 fell 0.08% to end the session at 4,076.79 points.

The Nasdaq gained 0.13% to 11,482.45 points, lifted by gains of more than 1% each in Nvidia ( NVDA.O ) and Facebook owner Meta Platforms ( META.O ).

The Dow Jones Industrial Average fell 0.56% to 34,396.53 points, dragged down by Salesforce.

Of the 11 S&P 500 sector indexes, seven, led lower by financials ( .SPSY ), fell 0.71%, followed by a 0.47% loss in consumer staples ( .SPLRCS ).

A report from the US Labor Department on Thursday showed that initial claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 225,000 for the week ended November 26.

Investors now await payroll data on Friday for clues on how interest rate hikes have affected the labor market.

With one month left in 2022, the S&P 500 is down approx. 14% so far this year, and the Nasdaq has lost approx. 27%.

Advancing issues outnumbered decliners in the S&P 500 (.AD.SPX) by a ratio of 1.1 to one.

The S&P 500 posted 32 new highs and no new lows; The Nasdaq recorded 118 new highs and 91 new lows.

Volume on US exchanges was relatively high, with 11.7 billion shares traded, compared with an average of 11.3 billion shares over the previous 20 sessions.

Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru, and by Noel Randewich in Oakland, California; Editing by Shounak Dasgupta and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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