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Dow touches 2023 peak as investors eye end of robust November

Tan KW
Publish date: Fri, 01 Dec 2023, 10:31 AM
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NEW YORK: The Dow Jones Industrial Average touched its 2023 peak, but the S&P 500 and the Nasdaq lagged as investors approached the finish line of a banner month for stocks and viewed cooling inflation data through the lens of Federal Reserve monetary policy.

The Dow was the clear outperformer, breaching its 2023 intraday high with a solid boost from Salesforce on the heels of its consensus-beating earnings report.

Tech and tech-adjacent momentum stocks, led by Nvidia , weighed heaviest on the S&P 500 and the Nasdaq.

Still, the S&P 500 remains on track for its largest monthly percentage gain since July 2022. November also appears set to be the Nasdaq's best month for percentage gains since January and the Dow's best month since October 2022.

"November was a big up month, the S&P got ahead of itself in July, then bottomed around the end of October. It had gotten oversold and, lo and behold, we had a nice rally," said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta.

"(Investors are) a little worried as to what's going to happen for the remainder of the year, but the market probably has enough ammunition left that it should end the year higher from here."

Among a swath of data released Thursday morning, the Commerce Department's closely watched Personal Consumption Expenditures (PCE) report showed inflation is cooling as expected, along with consumer spending. The data seemed to cement expectations that the Fed has completed its rate hiking cycle.

While New York Fed President John Williams reiterated the central bank's determination to remain data dependent, he would not rule out the possibility of further rate hikes if inflation fails to continue to moderate.

"(The PCE data) continues to confirm the downward trend of inflation," Martin said. "The more prints we get in that direction, the more it bolsters the case that we're making progress toward the Fed's 2% target."

"The one thing (Fed Chairman Jerome) Powell has been consistent about is nothing works if you don't have inflation under control, and the Fed is not going to declare victory until we get there," Martin added.

Financial markets have priced in a 95.8% likelihood that the central bank will let its key Fed funds target rate stand at 5.25%-5.50% at December's policy meeting.

Powell is scheduled to participate in two separate discussions on Friday, at 11 a.m. and again at 2 p.m.

At 2.09pm ET, the Dow Jones Industrial Average rose 319.02 points, or 0.9%, to 35,749.44, the S&P 500 lost 5.63 points, or 0.12%, at 4,544.95 and the Nasdaq Composite dropped 109.54 points, or 0.77%, to 14,148.95.

Among the 11 major sectors of the S&P 500, communication services suffered the steepest percentage decline, while healthcare stocks outperformed.

Dow Transports, considered a barometer of economic health, advanced 1.1%.

Salesforce jumped 7.9% following the company's higher-than-expected profit forecast based on solid demand for its cloud services.

Ford Motor Co slid 3.7% after the automaker set the cost of a new labor deal at $8.8 billion and cut its full-year forecast.

Data cloud company Snowflake surged 7.1% after it forecast fourth-quarter product revenue above Street estimates.

Pinterest and Snap Inc gained 2.8% and 6.0%, respectively, after Jefferies upgraded the social media firms to "buy" from "hold."

Advancing issues outnumbered decliners on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favoured decliners.

The S&P 500 posted 17 new 52-week highs and two new lows; the Nasdaq Composite recorded 54 new highs and 90 new lows.

 - Reuters

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