(Reuters) – The S&P 500 fell slightly on Thursday as hawkish comments from a US Federal Reserve official and data showing the labor market remains tight had some investors worried about more sharp interest rate increases.
Shares fell sharply early in the session and then rebounded, with the Dow Jones rising last, boosted by an upbeat earnings forecast from Cisco Systems. (CSCO.O).
Stocks have fallen in recent days after a strong month-long rally after weaker-than-expected inflation reports raised hopes that the Federal Reserve would limit its interest rate hikes.
“Hope is eternal in the stock market, and the markets are fighting the Fed,” said Samir Samana, senior global market analyst at the Wells Fargo Investment Institute in St. Louis.
“You had these reversals, you had these incredible highs. But, when you look back at the whole of 2022, you had lower highs and lower lows and there is no indication that we broke that pattern.”
Dow Jones Industrial Average (.DJI) The S&P 500 rose 22.8 points, or 0.07%, to 33,576.63. (.SPX) It lost 9.27 points, or 0.23%, to 3,949.52 points, and the Nasdaq Composite. (nineteenth) It fell 9.73 points, or 0.09%, to 11,173.93 points.
St. Louis Fed President James Bullard said the central bank needs to continue raising interest rates since its tightening so far has “had only limited effects on observed inflation.”
Data showed that the number of Americans filing new claims for unemployment benefits fell last week, suggesting the labor market remained tight, after a report on Wednesday detailed strong retail sales growth last month that indicated the economy had outgrown interest rate hikes.
Bets from traders on a 75 basis point increase in the next Fed meeting rose to 19% from about 15% the day before, according to CME Group’s FedWatch tool, with the remaining odds set on a smaller 50 basis point increase.
Cisco shares rose more than 4% after the company raised full-year revenue and earnings forecasts while easing supply chain hurdles. The stock helped drive a 0.3% increase in the S&P 500 heavyweight IT sector (.SPLRCT).
Most sectors of the S&P 500 were down, however, with utilities (.SPLRCU) and materials (.SPLRCM) Both are down about 1.4%.
In other company news, shares of Macy’s (MN) rose more than 14% after the supermarket chain raised its annual profit forecast thanks to resilient demand for high-end clothing and beauty products.
Low issues outnumbered high issues on the NYSE by a ratio of 2.54 to 1; On the Nasdaq, the ratio was 1.83 to 1 in favor of declining stocks.
The S&P 500 posted no new 52-week highs and one new low; The Nasdaq index posted 28 new highs and 144 new lows.
Additional reporting by Louis Krauskopf in New York and Pansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi, Arun Koyoor, and David Gregorio
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