S&P 500 closed higher, led by defensive stocks

  • Fed’s Collins sees a 75bp hike on the table
  • Grindr is stepping into the market for the first time
  • Gap stocks rise on optimistic results
  • Indices rose: Dow 0.59%, Standard & Poor’s 0.48%, Nasdaq 0.01%

(Reuters) – Wall Street’s benchmark S&P 500 closed higher on Friday in a choppy trading session, as defensive stock gains offset energy declines and investors shrugged off hawkish comments from Federal Reserve officials about raising interest rates.

Boston Fed Leader Susan Collins said that with little evidence that price pressures are waning, the Fed may need to raise interest rates by 75 basis points as it seeks to control inflation.

On Thursday, James Bullard, President of the Federal Reserve Bank of St. Louis, triggered stock declines when he said the Fed needs to keep raising interest rates given that its tightening so far has “had only limited effects on observed inflation.”

“We had a very tough talk, but the market really took it in stride,” said Keith Lerner, chief investment officer at Trust Advisory Services, with Collins and then Bullard. “The market has not been hit to the downside as it has in the past.”

The Dow Jones Industrial Average rose 199.37 points, or 0.59%, to 33,745.69, the Standard & Poor’s 500 rose 18.78 points, or 0.48%, to 3,965.34 points, and the Nasdaq Composite Index increased 1.11 points, or 0.01%, to 11,146.06.

Over the course of the week, the S&P 500 fell 0.7%, retreating modestly after a strong month-long rally driven by weaker-than-expected inflation data that raised hopes that the central bank may moderate interest rate hikes in the market.

The Nasdaq fell 1.6% for the week, while the Dow Jones was basically unchanged.

“Markets are kind of in a holding pattern,” ahead of employment and other economic data, said Lorraine Goodwin, economist and portfolio strategist at New York Life Investments.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, November 15, 2022. REUTERS/Brenda McDermid/File Photo

“What drives all stocks, of course, is Fed policy and the gravitational pull that rising interest rates have on the stock complex as a whole,” Goodwin said. “It is unlikely that we will see any real evidence with respect to the possibility of lower wage pressure or inflation pressure for another couple of weeks.”

Defensive groups led the way among the S&P 500 sectors, with utilities (.SPLRCU) up 2%, real estate (.SPLRCR) up 1.3% and healthcare (.SPXHC) up 1.2%.

The energy sector (.SPNY) fell 0.9%, as oil prices fell, on concerns about weak demand in China and an increase in US interest rates.

In company news, shares of gay dating app Grindr soared 214% in its market debut after the company completed its merger with a special purpose acquisition company.

Shares of Gap Inc (GPS.N) rose 7.6% after the company beat Wall Street estimates for quarterly sales and earnings.

Shares of Live Nation Entertainment (LYV.N) fell 7.8% after The New York Times reported that the US Department of Justice was investigating whether Ticketmaster abused its power over the multi-billion dollar live music industry.

Advance issues outnumbered declining issues on the NYSE by a ratio of 1.54 to 1; On the Nasdaq, the ratio was 1.13 to 1 in favor of the advanced traders.

The S&P 500 posted 8 new highs in 52 weeks and 3 new lows; The Nasdaq Composite recorded 62 new highs and 141 new lows.

About 9.7 billion shares traded on US exchanges, compared to the daily average of 12 billion over the last 20 sessions.

Additional reporting by Louis Krauskopf in New York and Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi, Arun Koyoor, and Grant McCall

Our Standards: The Thomson Reuters Trust Principles.

#closed #higher #led #defensive #stocks

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