Stocks have moved sharply higher in morning trading on Friday, extending the rebound seen in the previous session. The major averages have all shown strong moves to the upside, with the tech-heavy Nasdaq reaching a new nine-month intraday high.
Currently, the major averages are hovering near their best levels of the day. The Nasdaq is up 229.66 points or 1.8 percent at 12,927.76, the S&P 500 is up 50.33 points or 1.2 percent at 4,201.61 and the Dow is up 357.95 points or 1.1 percent at 33,122.60.
The jump by the Dow comes after the blue chip index bucked yesterday’s uptrend and edged down to its lowest closing level in almost two months.
Stocks are benefiting from renewed optimism about raising the U.S. debt ceiling amid reports lawmakers are closing in on an agreement.
Recent reports suggest lawmakers are inching closer to an agreement that would raise the debt limit for about two years and cap federal spending at the same level as fiscal 2023 for two years.
A report from CNBC said the deal would also include rescinding some of the $80 billion allocated for the IRS by last year’s Inflation Reduction Act.
Optimism about a debt ceiling deal has overshadowed a Commerce Department showing a reacceleration in the annual rate of consumer growth in the month of April.
The report said the annual rate of consumer price growth accelerated to 4.4 percent in April after slowing to 4.2 percent in March. Economists had expected the pace of growth to slow to 3.9 percent.
The annual rate of growth by core consumer prices, which exclude food and energy prices, also accelerated to 4.7 percent in April after slowing to 4.6 percent in March. Economist had expected the pace of growth to be unchanged.
On a monthly basis, consumer prices rose by 0.4 percent in April after inching up by 0.1 percent in March, while core consumer prices also increased by 0.4 percent in April after rising by 0.3 percent in March.
Ryan Sweet, Chief US Economist at Oxford Economics, said the data will “keep the discussion about the Fed skipping a hike in June and then resume tightening in July alive.”
Sector News
Technology stocks are once again leading the rally on Wall Street, with semiconductor stocks showing another substantial move to the upside.
Reflecting the strength in the sector, the Philadelphia Semiconductor Index has spiked by 4.2 percent, reaching its best intraday level in well over a year.
Marvell Technology (MRVL) is leading the sector higher after the chipmaker reported better than expected fiscal first quarter results and said it expects revenue growth to accelerate in the second half.
Networking, computer hardware and software stocks are also seeing significant strength, contributing to the surge by the Nasdaq.
Outside the tech sector, airline and retail stocks have shown strong moves to the upside, while some weakness is visible among interest rate-sensitive utilities stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both rose by 0.4 percent, while South Korea’s Kospi inched up by 0.2 percent.
The major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged by 1.4 percent, the German DAX Index is up by 1.3 percent and the U.K.’s FTSE 100 Index is up by 0.9 percent.
In the bond market, treasuries have fluctuated over the course of the morning and are currently in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 3.851 percent.
Business News
U.S. Stocks Move Sharply Higher On Renewed Optimism About Debt Ceiling Deal
2023-05-26 15:15:00
