S&P 500 slips as hawkish rate view, labor data weigh

  • Fed’s Bullard supports more rate hikes
  • Cisco rises after partnership raises full-year outlook
  • Macy’s jumps on profit forecast
  • Indexes. Dow up 0.07%, S&P down 0.23%, Nasdaq down 0.09%

Nov 17 (Reuters) – The S&P 500 edged modestly lower on Thursday as dovish comments from a U.S. Federal Reserve official and data on a tight labor market left some investors wary of more aggressive rate hikes.

Stocks fell sharply early in the session before recovering, with the Dow last higher on support for an upbeat earnings forecast for Cisco Systems ( CSCO.O ).

Stocks retreated in recent days after a strong month-long rally after softer-than-expected inflation reports fueled hopes that the Fed would hold back on its rate hikes.

“Hope is eternal in the stock market and markets are fighting the Fed,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in St. Louis.

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“You had these turnarounds, you had these spectacular rallies. But still, when you look back through 2022, you’ve had lower and lower declines, and there’s no indication that we’ve broken that pattern.”

The Dow Jones Industrial Average (.DJI) rose 22.8 points, or 0.07%, to 33,576.63, while the S&P 500 (.SPX) lost 9.27 points, or 0.23%. to 3,949.52 and the Nasdaq Composite up 3,576.63 points, or 0.23%. 0.09% to 11173.93.

St. Louis Fed President James Bullard said the central bank should keep raising interest rates, given that its tightening so far has had “only a limited impact on observed inflation.”

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Data showed the number of Americans filing new claims for jobless benefits fell last week, suggesting the labor market remains tight, after a report on Wednesday detailed strong retail sales growth last month that showed , that the economy has withstood the rise in interest rates.

Traders’ bets on a 75-basis-point hike at the Fed’s next meeting rose to 19%, up from about 15% a day earlier, according to CME Group’s FedWatch tool, while the rest of the odds were smaller at 50 basis points.

Cisco shares rose more than 4% after the company raised its full-year revenue and profit guidance on easing supply chain disruptions. The stock helped the information technology heavyweight S&P 500 (.SPLRCT) gain 0.3%.

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Most S&P 500 sectors were lower, however, with utilities (.SPLRCU) and materials (.SPLRCM) both down about 1.4%.

In other company news, shares of Macy’s ( MN ) rose more than 14% after the department store chain raised its full-year profit forecast on resilient demand for high-end apparel and beauty products.

Declining issues outnumbered advancers on the NYSE by a ratio of 2.54 to 1; A 1.83-to-1 ratio on the Nasdaq favored decliners.

S&P 500 not set new 52-week high and 1 new low; The Nasdaq Composite posted 28 new highs and 144 new lows.

By Lewis Krauskopf in New York, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi, Arun Koyur and David Gregorio

Our standards. Thomson Reuters Trust Principles.

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