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U.S. Stocks Close Little Changed Ahead Of Key Inflation Data

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November 29 2023 11:41AM

After ending the previous session modestly higher, stocks showed a lack of direction over the course of the trading day on Wednesday. Despite the choppy trading on the day, the Dow inched up to its best closing level in over three months.

The major averages eventually ended the day narrowly mixed. While the Dow crept up 13.44 points or less than a tenth of a percent to 35,430.42, the Nasdaq slipped 23.27 points or 0.2 percent to 14,258.49 and the S&P 500 edged down 4.31 points or 0.1 percent to 4,550.58.

Stocks saw early strength amid ongoing optimism about the outlook for interest rates despite conflicting remarks by Federal Reserve officials.

While Fed Governor Christopher Waller said Tuesday he is “increasingly confident that policy is currently well positioned,” Fed Governor Michelle W. Bowman said she expects further rate hikes will be needed.

Traders seem to be focusing more on the comments that reinforce expectations the Fed will leave policy unchanged until cutting rates beginning in mid-2024.

Positive sentiment also generated in reaction to a surge by shares of General Motors (GM), with the auto giant spiking by 9.4 percent after announcing $10 billion stock buyback and increasing its dividend.

Buying interest waned as the day has progress, however, with traders looking ahead to the release of key inflation readings on Thursday.

The Commerce Department’s report on personal income and spending includes readings on inflation said to be preferred by the Fed and could impact on the outlook for interest rates.

Sector News

Computer hardware stocks saw substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 2.9 percent to a record closing high.

Data infrastructure company NetApp (NTAP) led the sector higher after reporting better than expected fiscal second quarter results and raising its fiscal third quarter and full-year guidance.

Significant strength was also visible among banking stocks, as reflected by the 2.0 percent surge by the KBW Bank Index. The index reached its best closing level in over three months.

Telecom, brokerage and semiconductor stocks also saw notable strength, while tobacco stocks and energy stocks moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index edged up by 0.2 percent and the German DAX Index jumped by 1.1 percent.

In the bond market, treasuries extended the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.5 basis points to a new two-month closing low of 4.271 percent.

Looking Ahead

The inflation readings are likely to be in the spotlight on Thursday, while traders are also likely to keep an eye on reports on weekly jobless claims and pending home sales.

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