| |
Financial Markets 11/20 09:31
NEW YORK (AP) -- Relief is running through Wall Street on Thursday, and the
U.S. stock market is rallying after it seemed to pass a couple of crucial
tests. Not only did Nvidia provide another blockbuster profit report that
suggested AI superstar stocks can keep rising, a mixed report on the U.S. jobs
market kept alive hopes that the Federal Reserve can deliver more cuts to
interest rates.
The S&P 500 climbed 1.7% and pulled closer to its all-time high, which it
set almost a month ago. The Dow Jones Industrial Average was up 581 points, or
1.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 2.2% higher.
Nvidia led the way and rose 3.9% after reporting another big profit for the
summer that topped analysts' expectations, while also giving a forecast for
coming revenue that easily cleared analysts' estimates.
That helped quiet worries that Wall Street's most influential stock and
others caught up in the frenzy around artificial-intelligence technology simply
shot too high. Critics have ben saying they were reminiscent of the 2000
dot-com bubble that ultimately imploded, and Nvidia's stock had briefly dropped
more than 10% from its record.
By delivering big profits and indicating more in the future, Nvidia and
other stocks can justify their stocks' price gains and make them look less
expensive.
Given the forecasts that Nvidia gave late Wednesday, "it is very hard to see
how this stock does not keep moving higher from here," according to analysts at
UBS led by Timothy Arcuri. They also said "the AI infrastructure tide is still
rising so fast that all boats will be lifted."
Other AI-linked stocks rose in the wake of Nvidia's report, including gains
of 5.1% for Palantir Technologies and 2.8% for Oracle.
Stocks outside of AI, meanwhile, rose on continued hopes that the Fed may
deliver another energizing cut to interest rates next month.
Thursday's delayed jobs report showed that hiring by U.S. employers was
stronger in September than economists expected, but the unemployment rate also
worsened slightly.
Financial markets seemed to pick the data apart for encouraging signals,
according to Seema Shah, chief global strategist at Principal Asset Management.
The strong hiring numbers may suggest the economy remains solid, while rising
unemployment may give the Fed reason to cut its main interest rate at its next
meeting in December.
Traders still see it as relatively unlikely, giving it a 42% probability,
but that's better than the 30% chance they saw a day earlier, according to data
from CME Group.
What the Fed does is critical for the stock market because prices ran to
records in part because of expectations for continued cuts to rates.
Lower rates can give a boost to the economy and to prices for investments,
but they can also worsen inflation, which has stubbornly remained above the
Fed's 2% target.
Elsewhere on Wall Street, Walmart rose 3.3% after the retailer delivered
another standout quarter. It reported strong sales and profits that blew past
Wall Street expectations as it continues to lure cash-strapped Americans who
have grown increasingly anxious about the economy and prices.
With other retailers dialing back projections, the nation's largest retailer
raised its financial outlook Thursday after its strong third quarter, setting
itself up for a strong holiday shopping season.
In the bond market, the yield on the 10-year Treasury eased to 4.10% from
4.13% late Wednesday.
In stock markets abroad, indexes rallied across much of Europe and Asia.
Japan's Nikkei 225 jumped 2.6%, and South Korea's Kospi rose 1.9% for two of
the bigger gains.
___
AP Writers Teresa Cerojano and Matt Ott contributed.
---------
itemid:71372f3476dd13c33d316819bf902b17
|
|
