Wall Street gains as bank concerns fade, focus on inflation data

(Reuters) – Wall Street’s main indexes rose on Thursday as fears of a banking crisis receded, as interest rate-sensitive real estate and technology stocks led gains ahead of key inflation data that could shape the Fed’s policy path.

Investors are awaiting a February reading of the Personal Consumption Expenditure (PCE) price index, the Fed’s preferred measure of inflation, due for release on Friday after January figures showed a sharp acceleration in consumer spending.

Thursday’s data showed that last week’s jobless claims rose more-than-expected from the previous week to indicate a slowdown in the labor market, while fourth-quarter gross domestic product growth was slightly lower at 2.6% than a previous estimate of 2.7%, both of which support the Fed’s case for more. softness. Policy.

Tom Hopkins, portfolio manager at BRI Wealth Management, said, “Despite the (Gross Domestic Product) downgrade, it is still showing strength despite higher interest rates and higher inflation…but it has shown signs that the US economy is losing momentum.” .

Investors will also analyze comments from Boston Fed President Susan Collins, Minneapolis Fed President Neel Kashkari and Richmond President Thomas Barkin later in the day for clues about the central bank’s monetary policy plans in the aftermath of the banking crisis.

Traders’ bets are now split roughly evenly between a pause and a 25 basis point rate hike by the Fed in May, according to CME Group’s Fedwatch tool.

Megacaps Apple Inc (AAPL.O), Tesla Inc (TSLA.O), Amazon.com (AMZN.O), and Microsoft Corp (MSFT.O) rose 0.4% to 1.1%, lifting consumer discretion. (.SPLRCD) and technology (.SPLRCT) indexes by 0.8% each.

Real estate stocks (.SPLRCR) led the sectoral gains, up 1.1%.

The banking turmoil, which began earlier this month with the collapse of US regional lenders, has raised concerns about a broader financial crisis and led to a significant shift in monetary policy expectations from the Federal Reserve.

Despite the turmoil in the banking sector, the S&P 500 (.SPX) and Nadsaq (.IXIC) are both poised for quarterly gains, with the latter on track for its best quarter since the end of 2020.

At 9:39 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 148.06 points, or 0.45%, at 32,865.66, the S&P 500 (.SPX) was up 22.97 points, or 0.57%, at 4,050.78, and the Nasdaq. The Composite Index (.IXIC) rose 73.81 points, or 0.62%, to 12,000.05 points.

Among other stocks, Faraday Future Intelligent Electric Inc (FFIE.O) jumped 1.5% after the company said it had started production of its first luxury electric car after a months-long delay.

Streaming platform Roku Inc (ROKU.O) gained 1.3% with plans to cut about 200 jobs, while Kohl’s Corp (KSS.N) climbed 6.9% after its CEO bought shares in the company.

Shares of US-listed Alibaba Group Holding advanced 2.7% after its logistics arm was reported to have begun preparations with banks for an initial public offering in Hong Kong, while JD.Com rose 7% on plans to spin off its real estate infrastructure arm.

Advances outnumbered losers 7.33 to 1 on the New York Stock Exchange and 2.87 to 1 on the Nasdaq.

The S&P posted six new highs in 52 weeks without a new low, while the Nasdaq posted 34 new highs and 28 new lows.

(Cover) By Amruta Khandekar and Ankika Biswas; Additional reporting by Sruthi Shankar. Editing by Anil D’Silva and Vinay Dwivedi

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