December 7, 2022

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Wall Street rises amid data, RBA move raises hopes of Fed easing

Wall Street rises amid data, RBA move raises hopes of Fed easing
  • Twitter jumps on Musk news to resume acquisition at $54.20/share
  • Rivian gains from reaffirming the fiscal year delivery view; raise peers
  • US job opportunities post biggest 2.5-year drop in August
  • Indexes up: Dow 2.35%, Standard & Poor’s 2.61%, Nasdaq 2.93%

(Reuters) – Wall Street surged for a second day in a row on Tuesday after weak US economic data lowered Treasury yields and the Reserve Bank of Australia raised interest rates less than expected, providing hope that the Federal Reserve will soon ease its aggressive rate increases. .

While demand for labor remains fairly strong, US job opportunities fell by the most in nearly two and a half years in August in another sign that the Fed may ease its mission to tame inflation by tightening policy. Read more

Earlier, the Reserve Bank of Australia surprised the markets by raising the interest rate by 25 basis points less than expected. The cash rate rose to a nine-year high after six interest rate increases in several months, following similar moves by other central banks. Read more

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Anthony Saglimpin, chief market analyst at Ameriprise Financial in Troy, Michigan, said the Reserve Bank of Australia is the first major central bank to realize it’s time to slow down after aggressively raising interest rates this year.

“There is hope that the Fed will say the same sometime in the fourth quarter. It doesn’t stop raising interest rates, but just slows the pace,” he said. “This is the kind of market that rushes under the surface.”

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However, Fed Governor Philip Jefferson said inflation is the most serious problem facing the US central bank and “it may take some time” to address it. Mary Daly, president of the Federal Reserve Bank of San Francisco, said the central bank needs to raise interest rates further. Read more Read more

Interest rate-sensitive technology stocks rose as yields on the benchmark 10-year Treasury fell for a second day after jobs data and the surprise move by the Reserve Bank of Australia. Valuations for technology and other growth stocks are related to the cost of capital.

If gains are made, the Nasdaq Composite Index (nineteenth) It is set to post its best one-day performance since July 27, while the Dow Jones Industrial Average (.DJI) and S&P 500 (.SPX) They were about to record their biggest two-day rally since April 2020.

Billionaire Elon Musk has proposed going ahead with his original $54.20 bid to acquire Twitter Inc. (TWTR.N) The social media company’s stock rose 12.67%, two sources familiar with the matter said on Tuesday. Tesla shares were up about 6% before the news and immediately pared their gains, up about 2.25% on the day. Read more

Giant titans led the way with Amazon.com Inc (AMZN.O) Up 4.36% and Microsoft (MSFT.O) Up 2.90%. Apple company (AAPL.O) It rose 1.90% while Alphabet Inc (GOOGL.O) 2.62%.

At 2:30 p.m. ET, the Dow Jones Industrial Average (.DJI) It rose 667.54 points or 2.26% to 30,158.43 points, the Standard & Poor’s 500 (.SPX) It rose 92.64 points, or 2.52%, to 3,771.07 points, and the Nasdaq Composite (nineteenth) It added 306.59 points, or 2.83%, to 11,122.03 points.

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Banks such as Citigroup, Morgan Stanley and Goldman Sachs rose nearly 5%, boosting the Banks Index. (.SPXBK) by 4%.

The rally was broad-based, with less than ten of the S&P 500 index trading in negative territory.

Stocks Rebound Monday After the S&P 500 Index (.SPX) The lowest shutdown in nearly two years last week capped the worst monthly performance in September since March 2020.

Rivian Automotive Company (Rivno) It jumped 13.4% after the electric vehicle maker said it produced 7,363 units in the third quarter, up 67% from the previous quarter, and maintained its full-year target of 25,000. Read more

The S&P 500 hit a new 52-week high and a new low. The Nasdaq recorded 45 new highs and 56 new lows.

(This story has been corrected to say the Reserve Bank of Australia raised rates rather than lowered them in the first paragraph.)

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Additional reporting by Medha Singh, Ankika Biswas and Bansari Mayor Kamdar in Bengaluru; Editing by Anil de Silva, Aaron Coeur, Sriraj Kalovila and Richard Chang

Our criteria: Thomson Reuters Trust Principles.