Wall Street ends higher after choppy session ahead of Fed
Summary
Summary Companies Estee Lauder sinks after China curbs dent outlook
Western Digital jumps after call to break up business units
Indexes: Dow up 0.2%, S&P 500 up 0.48%, Nasdaq up 0.22%
May 3 (Reuters) – Wall Street stocks ended higher on Tuesday after a choppy session in which each of the major indexes fluctuated between gains and losses as a key meeting of the Federal Reserve got under way.
Investors picked up shares of financials and technology companies ahead of Wednesday’s expected announcement by the Fed.
Nine of the 11 major S&P 500 sectors rose, with energy (.SPNY) and financials (.SPSY) up 2.9% and 1.3%, respectively. The S&P 500 banks index (.SPXBK) gained 2%, with Citigroup Inc (C.N) climbing 2.9%.
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The U.S. central bank kicked off its two-day policy meeting on Tuesday. Traders see a 99.9% chance of a 50 basis-point hike on Wednesday, according to CME’s FedWatch Tool, which would mark the largest rate hike by the Fed since May 2000. IRPR
The spotlight stays on Fed Chair Jerome Powell’s news conference on Wednesday for comments on the future path of interest rates and balance-sheet reduction. read more
“The number one driver of all the market volatility over the last several months has been the Fed and the Fed hawkish rhetoric, so getting an update from them at a Powell press conference (on Wednesday) is a major catalyst and I think the market now is kind of just in waiting mode,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.
In April, Wall Street was hammered by uncertainty around the Fed’s ability to engineer a soft landing for the economy, mixed earnings from some big growth companies, the war in Ukraine and pandemic-related lockdowns in China.
The Nasdaq Composite (.IXIC) slumped nearly 13.3% last month, its worst monthly performance since October 2008 as richly valued high-growth stocks came under pressure from rising rates.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 3, 2022. REUTERS/Brendan McDermid
The Dow Jones Industrial Average (.DJI) rose 67.29 points, or 0.2%, to 33,128.79, the S&P 500 (.SPX) gained 20.1 points, or 0.48%, to 4,175.48 and the Nasdaq Composite (.IXIC) added 27.74 points, or 0.22%, to 12,563.76.
The indexes were boosted by stocks including Apple Inc (AAPL.O), Tesla Inc (TSLA.O) and Exxon Mobil Corp (XOM.N), which rose between 0.7% and 2.1%.
Estee Lauder Cos Inc (EL.N) slumped 5.8% after the cosmetics maker cut its full-year profit forecast due to fresh COVID-19 restrictions in China and the Russia-Ukraine crisis. read more
Hilton Worldwide Holdings Inc (HLT.N) slid 4.2% after the hotel operator forecast a bleak full-year profit. read more
Western Digital Corp (WDC.O) jumped 14.5% as the largest percentage gainer on the S&P 500 after activist investor Elliott Investment Management urged the company to separate its Flash business and offered to invest $1 billion to facilitate a sale or a spin-off of the business. read more
Volume on U.S. exchanges was 11.35 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored advancers.
The S&P 500 posted 2 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 29 new highs and 195 new lows.
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Reporting by Echo Wang in New York and Devik Jain in Bengaluru Editing by Anil D’Silva and Matthew Lewis
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