Stocks drifted on Wall Street Wednesday as trading remains relatively light ahead of the New Year holiday. The S&P 500 fell 0.1%. The Dow Jones Industrial Average rose 44 points, or 0.1%, as of 10:53 a.m. Eastern. The Nasdaq composite fell 0.1%. Markets are holding on to small gains for the week so far. The S&P 500 is coming off its eighth straight winning week.
Quick Read
- Wall Street Trading Activity: Stocks on Wall Street showed varied performance on Wednesday, with the S&P 500 slightly down by 0.1%, the Dow Jones Industrial Average rising by 44 points (0.1%), and the Nasdaq composite also falling by 0.1%. This trading activity comes amid a relatively light trading period ahead of the New Year holiday.
- Performance of Technology Companies: The broader market was impacted by losses in some major technology companies, with Apple falling by 0.7% and Alphabet (Google’s parent company) slipping by 1%.
- Gains in Retail and Auto Sectors: Contrasting the tech sector, certain retailers and auto-related companies saw gains. Notably, Tesla jumped 2.6% and Costco rose 1.2%.
- Global Market Trends: Markets in Europe and Asia experienced gains, aligning with some positive trends seen in the U.S. market.
- Bond Market: Bond yields decreased, with the yield on the 10-year Treasury falling to 3.83% from 3.90%.
- Biotechnology Sector Movements: There were significant movements in the biotech sector, with Cytokinetics surging 69% due to positive study updates, while Iovance Biotherapeutics dropped 21.8% after halting a lung cancer treatment study.
- The New York Times Stock Movement: The New York Times’ stock rose 2.3% following its announcement of a lawsuit against OpenAI and Microsoft regarding the use of its stories to train chatbots.
- Year-End Market Outlook: As the year concludes, major indexes like the S&P 500 and Nasdaq are set to record substantial annual gains, with increases of 24% and 43%, respectively.
- Economic Context: Investors are generally optimistic due to reports of declining inflation and stronger-than-expected economic resilience. The Federal Reserve’s balancing act between controlling inflation and avoiding a recession is a key factor in the market’s dynamics.
- Inflation and Economic Growth Data: Inflation slowed to 2.6% in November, a significant decrease from mid-2022 levels. U.S. economic growth has been stable, showing recovery and acceleration in the third quarter of 2023.
- Recession Outlook and Federal Reserve’s Rate Policy: The economic data have raised hopes of avoiding a severe recession and have led investors to anticipate that the Federal Reserve might cease rate hikes and possibly reduce rates starting as early as March 2024. The Fed has maintained steady rates since July.
The Associated Press has the story:
Wall Street drifts as a strong year for markets winds down
Newslooks- NEW YORK (AP)
Stocks drifted on Wall Street Wednesday as trading remains relatively light ahead of the New Year holiday.
The S&P 500 fell 0.1%. The Dow Jones Industrial Average rose 44 points, or 0.1%, as of 10:53 a.m. Eastern. The Nasdaq composite fell 0.1%. Markets are holding on to small gains for the week so far. The S&P 500 is coming off its eighth straight winning week.
Losses for some big technology companies weighed down the broader market. Apple fell 0.7% and Google’s parent company, Alphabet, slipped 1%.
A mix of retailers and auto-related companies were among the biggest gainers. Tesla jumped 2.6% and Costco rose 1.2%.
Markets in Europe and Asia gained ground.
Bond yields fell. The yield on the 10-year Treasury fell to 3.83% from 3.90% late Tuesday.
Several biotechnology companies made big moves after giving investors updates on drug development. Cytokinetics surged 69% on an encouraging study update for a potential heart condition treatment. Iovance Biotherapeutics shed 21.8% after pausing a study on a potential lung cancer treatment because of a possible safety issue.
The New York Times rose 2.3% after filing a federal lawsuit against OpenAI and Microsoft, seeking to end the practice of using its stories to train chatbots.
With just three days left in the year, major indexes are on track to post hefty annual gains. The S&P 500 is up 24% for the year, while the Nasdaq, which is heavily weighted with technology companies, is up 43%.
The final week of 2023 lacks any big economic updates. Overall, investors have been encouraged by reports showing inflation is on the decline even as the economy appears stronger than expected. The Federal Reserve is walking a tightrope, seeking to slow the economy enough through high interest rates to cool inflation, but not so much that it tips the nation into recession.
Inflation slowed to a rate of 2.6% in November, according to a measure closely followed by the Fed. That’s down from 7.1% in the middle of 2022 and edging closer to the central bank’s target of 2% inflation. U.S. economic growth has been steady since contracting in the middle of 2022 and sharply accelerating in the third quarter of 2023.
The data have raised hopes that the economy will likely avoid a recession, or at least avoid a significant one. They have also encouraged Wall Street to bet that the Fed is done raising interest rates and will likely shift to rate cuts in the new year. The central bank has held rates steady since its meeting in July, and Wall Street expects it to start cutting rates as early as March.
