Wall Street was mixed as investors awaited Fed rate indications, data from Reuters
Written by Johann M Cherian and Purvi Agarwal
(Reuters) – Wall Street's main indexes were mixed on Wednesday, as they edged closer to record highs, as investors awaited more clues about the state of the economy and an upcoming interest rate cut.
The main indexes are slated for monthly gains helped by a rally triggered by the Federal Reserve's start of its policy easing cycle last week that raised expectations of a slower arrival. However, a weak consumer report on Tuesday encouraged some concern about the health of the labor market.
At 9:56 am, it fell 93.00 points, or 0.22%, to 42,115.22, the S&P 500 gained 3.09 points, or 0.05%, to 5,736.02 and gained 37.27 points, or 0.21%, to 1.7,9.
Eight of the 11 S&P 500 sectors trended higher with defensive sectors such as utilities and consumer staples among the biggest gainers. On the other hand, energy stocks edged lower with a loss of 0.9%.
Relatively sensitive stocks traded mixed. Nvidia (NASDAQ: ) gained 2.2%, while Apple (NASDAQ: ) fell 0.4%. Sales of foreign-branded smartphones, including iPhones, in China drop in August every year, data from a government-run research firm showed.
The yield on long-term Treasury bonds has weighed heavily on concerns that looser monetary conditions could reignite inflation. [US/]
The odds of a 50 basis point cut by the central bank at its November meeting rose to 59.5%, from a coin toss earlier in the week, according to CME Group's (NASDAQ: ) FedWatch Tool.
“Currently the data suggests that we are in a soft position to arrive. But I will not be surprised if the data changes quickly. Then the Fed will have to be more or less aggressive in cutting rates,” said Adam Sarhan. CEO of 50 Park Investments.
The S&P 500 and Nasdaq are up about 20% so far this year on expectations of a rate cut and optimism about artificial intelligence. However, the S&P 500 is trading higher than its long-term average.
The data showed new home sales in August stood at 0.716 million, compared with estimates of 0.7 million according to economists polled by Reuters.
However, the next test of the markets will be weekly jobless claims and personal spending data for August due later in the week.
Speeches from Fed Governor Adriana Kugler, due after the markets close, are also scrutinized. But the spotlight will remain on Chairman Jerome Powell's speech at the New York Treasury Markets Conference on Thursday.
Among the big movers, KB Home (NYSE: ) fell 4.4% after the homebuilder missed Wall Street expectations for third-quarter profit, with the housing index losing 1%.
Hewlett Packard Enterprise (NYSE: ) rose in the S&P 500 with a 5.6% gain after Barclays upgraded the server maker's stock to “overweight” from “equal weight”.
Ford (NYSE: ) lost 4.8% and General Motors (NYSE: ) fell 6% to underperform the benchmark index after Morgan Stanley cut its rating on the automaker.
Stocks weighed in the consumer discretionary sector which fell 0.6%.
Bearish issues outnumbered advancers by a 1.5-to-1 ratio on the NYSE and by a 1.62-to-1 ratio on the Nasdaq.
The S&P 500 posted a new 52-week high and one new low, while the Nasdaq Composite recorded 35 new highs and 35 new lows.
