Stock market today: Wall Street rallies and adds to its strong gains in November by Sally Bond

Stock market today: Wall Street rallies and adds to its strong gains in November

Sally Bond2023/11/11 23:14

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Wall Street rose sharply Friday, keeping November on track to be one of its best months of the year, as companies continued to turn in better profits for the summer than expected.

The S&P 500 leaped 1.6% amid a widespread rally. The Dow Jones Industrial Average gained 391 points, or 1.2%, and the Nasdaq composite was 2% higher.

Stocks climbed as financial markets recovered from a slump the prior day, triggered in part by worries that the Federal Reserve may hike its main interest rate further to get inflation under control. Bets diminished among traders on Friday that the Fed will increase rates at its next meeting, even though a report in the morning indicated expectations for inflation among U.S. households is on the rise.

This earnings reporting season is also turning out much better than analysts expected, and it’s likely to show the first growth in earnings per share for S&P 500 companies in a year, according to FactSet. But the focus is swinging toward what companies will do later this year and beyond as interest rates remain high and the U.S. economy is expected to slow.

“We think earnings growth can accelerate in 2024,” said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. That’s one reason he’s forecasting the S&P 500 can continue to rise modestly over the next year.

Hologic jumped 7.3% for the biggest gain in the S&P 500 after the maker of diagnostics and other products focused on women’s health reported better profit for the latest quarter than expected.

Doximity was another winner, up 16.2% after it likewise reported stronger profit than forecast.

Even some of Wall Street’s biggest losers for the day also reported better profit than expected.

Illumina tumbled 8% after the maker of DNA-sequencing and other technology products cut its financial forecasts for the full year and said “the environment remains challenging.” It reported better results for the third quarter than expected.

Wynn Resorts also topped analysts’ expectations for the latest quarter, but its stock fell 5.7% amid concerns about some weaker trends underneath the surface in Macao.

All told, the S&P 500 rose 67.89 points to 4,415.24. The Dow gained 391.16 to 34,283.10, and the Nasdaq jumped 276.66 to 13,798.11.

Big Tech stocks were the strongest forces pushing upward on the S&P 500, including a 2.3% gain for Apple and 2.5% rise for Microsoft.

They tend to be some of the biggest beneficiaries when interest rates and bond yields ease, and Treasury yields were holding relatively steady following their leap the prior day.

The yield on the 10-year Treasury dipped to 4.61% from 4.64% late Thursday.

The yield fell even though a report in the morning suggested U.S. consumers are girding for higher inflation. Their expectations for inflation over the long run rose to the highest since 2011, according to a preliminary reportfrom the University of Michigan.

The Federal Reserve has said it wants to keep such expectations low because they otherwise could lead to a vicious cycle that keeps inflation high. The release of the University of Michigan report initially caused Treasury yields to pare their drops, which caused stock indexes to wobble. But the stock market quickly shrugged off the data and continued to rise.

Fed Chair Jerome Powell earlier this month cautioned against overrating the report’s importance, when asked how key the University of Michigan reading was in the Fed’s thinking.

“We look at a range of things,” he said. “I think the UM thing got blown out of proportion a little bit, it was actually a preliminary estimate that got revised away, and I said it was preliminary in it, but that didn’t get picked up.”

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