Thursday, 18 April 2024

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Wall Street edges up on soft services sector data, Powell speech By Reuters

© Reuters. FILE PHOTO: The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo

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By Chibuike Oguh

NEW YORK (Reuters) -U.S. stocks rose on Wednesday, buoyed by data showing U.S. services industry growth slowed further in March, even as Federal Reserve Chair Jerome Powell reiterated that the central bank has time to deliberate over its first interest rate cut this year.

Nine out of the 11 major sectors were higher, led by energy, which was up 0.7%.

Powell reaffirmed in a speech on Wednesday that the Fed will stick to its wait-and-see approach as it considers when to start cutting rates given the continued strength of the U.S. economy and recent higher-than-expected inflation data.

Earlier on Wednesday, data from the Institute for Supply Management showed that non-manufacturing PMI declined for the second straight month to 51.4 in March, down from 52.6 in February, and weaker than analysts had expected, according to a Reuters poll.

A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy, and the data still indicates the U.S. economy continues to expand, though at a moderate pace.

“Markets started the day on a positive note ahead of Powell, and with the market still pricing in three rate cuts for the year, he kind of confirmed that he still sees rates being cut this year,” said Joshua Wein, portfolio manager at Hennessy Funds in North Carolina.

At 02:28 p.m. the rose 4.81 points, or 0.01%, to 39,175.78, the S&P 500 gained 14.95 points, or 0.29%, to 5,220.76 and the gained 77.88 points, or 0.48%, to 16,318.33.

Traders are pricing in a 57% chance the Fed will cut interest rates by 25 basis points in June, according to CMEGroup’s FedWatch tool, down from about 64% a week ago.

In separate comments to CNBC on Wednesday, Atlanta Fed President Raphael Bostic said rates should likely not be reduced until the fourth quarter of this year.

Among decliners, Ulta Beauty (NASDAQ:) was down 14.8% after the beauty retailer gave downbeat forecast at an industry conference. Shares of e.l.f. Beauty (NYSE:) fell 10.2%, while Coty (NYSE:) dropped 6%.

Also, Intel (NASDAQ:) fell 7.5% after the chipmaker disclosed $7 billion in operating losses for its foundry business in 2023, steeper than the $5.2 billion reported the year before.

Advancing issues outnumbered decliners by a 1.81-to-1 ratio on the NYSE. There were 264 new highs and 54 new lows on the NYSE. On the Nasdaq, 2,457 stocks rose and 1,716 fell as advancing issues outnumbered decliners by a 1.43-to-1 ratio.

The S&P 500 posted 32 new…

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