U.S. stocks ended higher on Wednesday on optimism that the Federal Reserve may be done raising interest rates and that the economy is still resilient. The Canadian benchmark index was nearly unchanged, as a decline in the energy sector offset gains in some interest rate-sensitive sectors.
Economic reports Wednesday on jobless claims, durable goods, and consumer sentiment seemed to suggest the U.S. economy is easing but may stay strong enough to avoid recession. Data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week.
Tuesday’s minutes on the last Fed meeting showed a cautious approach toward monetary policy. Still, stocks have risen sharply in recent weeks on the view the Fed is done hiking rates.
“Overall you have a solid backdrop to the market,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
“The signals for the market, despite concerns over the economy and consumer spending, is that this market has sustainability in what is probably the most hospitable season for the market.”
She said stocks tend to rise just before the U.S. Thanksgiving holiday and also rally heading into year-end. The market will be closed on Thursday for Thanksgiving.
The Dow Jones Industrial Average rose 184.74 points, or 0.53%, to 35,273.03, the S&P 500 gained 18.43 points, or 0.41%, at 4,556.62 and the Nasdaq Composite added 65.88 points, or 0.46%, at 14,265.86.
Big tech-related shares were among those giving the S&P 500 its biggest boost. Communication services rose 0.9%, leading S&P 500 gains in all sectors except for energy, which fell 0.1%.
Among the day’s negatives, Nvidia’s shares fell 2.5%, a day after the chip designer forecast overall fourth-quarter revenue above Wall Street targets, but warned U.S. export curbs could lead to a steep drop in sales in China.
Among other big movers, Deere & Co shares dropped 3.1% after the farm equipment maker forecast 2024 profit below analysts’ estimates.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 3.99 points at 20,113.96. It followed a decline for the market on Tuesday after notching on Monday its highest closing level in two months at 20,246.47.
Sectors that tend to produce predictable cash flows and could particularly benefit from a peak in interest rates were among the biggest gainers. The consumer staples sector rallied 2.6%, real estate added 1.1% and the utilities sector was up 0.4%.
Energy was a drag, falling 1.5% as oil settled 0.9% lower at US$77.10 a barrel after OPEC+ producers unexpectedly delayed a meeting on production cuts.
OPEC+ postponed the meeting, originally scheduled for Nov. 26, to Nov. 30, a surprise development that drove prices sharply lower in early trading. The group was expected to discuss whether to expand oil output cuts.
Oil prices trimmed losses following news that the disagreement was related to African countries, which are among the smaller producers in the group, rather than the top oil exporters.
Volume on U.S. exchanges was 8.57 billion shares, compared with the 10.82 billion average for the full session over the last 20 trading days. Advancing issues outnumbered decliners on the NYSE by a 1.97-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored advancers. The S&P 500 posted 45 new 52-week highs and one new low; the Nasdaq Composite recorded 89 new highs and 104 new lows.
Reuters, Globe staff