“Weakening inflation gives the Fed plenty of room to begin cutting rates, while still resilient household spending is the recipe for a soft landing,” said David Alcaly, lead macroeconomic strategist at Lazard Asset Management.
Bond yields were mixed in the Treasury market. The yield on the 10-year Treasury rose to 3.92 per cent from 3.86 per cent late Thursday.
Technology stocks led the market. Marvell Technology climbed 9.2 per cent after its latest quarterly results hit Wall Street’s sales and profit targets. Other chipmakers also rose. Broadcom added 3.8 per cent and Nvidia gained 1.5 per cent.
Dell also beat analysts’ second-quarter forecasts, boosted by record server and networking revenue as companies continue to beef up their artificial intelligence infrastructure. Its shares rose 4.3 per cent.
Mall-based cosmetics retailer Ulta Beauty fell 4 per cent after its sales and profit fell short of expectations. Ulta also trimmed its guidance below analysts’ forecasts. Warren Buffet’s Berkshire Hathaway revealed it holds a stake in the company earlier this month,
All told, the S&P 500 rose 56.44 points to 5,648.40. The Dow rose 228.03 points to close at 41,563.08. The Nasdaq gained 197.19 points to 17,713.62.
Mostly solid US earnings and economic growth updates capped off a month of encouraging reports for the broader economy. Data from various reports in August have shown that retail sales, employment and consumer confidence remain strong.
Loading
Friday’s Commerce Department report also showed that Americans stepped up their spending by a vigorous 0.5 per cent from June to July, up from 0.3 per cent the previous month, and incomes rose 0.3 per cent, faster in July than in the previous month.
The trends have encouraged Wall Street. Still, stocks have historically done poorly in September.
Since 1950, the S&P 500 has finished higher in September only 43 per cent of the time, making it the worst month for stocks, said Adam Turnquist, chief technical strategist for LPL Financial.
“During the month, the index tends to trade sideways during the first half, with losses beginning to accumulate into month end,” Turnquist said.
Investors will be looking for clues on the Fed’s next move next Friday, when the government serves up its latest monthly jobs report. Economists polled by FactSet are expecting the economy added 155,000 jobs in August. That would follow a gain of 114,000 the previous month.
“The payroll data next week is incredibly important,” said Liz Young Thomas, head of investment strategy at SoFi.
Markets in Europe rose initially following a report showing inflation fell sharply in the European Union this month. The report sets up the European Central Bank to cut interest rates next month. Major stock indexes in the region turned red by late afternoon. France’s CAC 40 slipped 0.1 per cent, Germany’s DAX and Britain’s FTSE 100 were essentially flat.
Markets in Asia rose. Japan’s benchmark Nikkei 225 added 0.7 per cent to finish at 38,647.75 after data on the world’s fourth-largest economy came in mostly positive.
US stock exchanges will be closed Monday for the Labor Day holiday.
AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
