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All three major stock indexes post weekly gains
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S&P 500 breaks through 50-day moving average
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Apple surges as Morgan Stanley hikes price target
(Updates to market close)
By Stephen Culp
NEW YORK, March 3 (Reuters) - Wall Street rallied on
Friday to end a volatile week, as U.S. Treasury yields eased and
economic data helped investors look past the growing likelihood
that the Federal Reserve will keep its restrictive policy in
place for longer than anticipated.
All three major U.S. stock indexes gained, led by the
tech-laden Nasdaq, which climbed close to 2% and got a boost
from interest rate sensitive megacaps. U.S. Treasury yields
eased in the wake of comments from Fed officials that calmed
fears over inflation and interest rates.
"It continues to be all about the Fed and how gracefully
they can slow the economy," said David Carter, managing director
at JPMorgan Private Bank in New York. "The Fed is telling
markets what they want to hear but also injecting the caution
that rates may need to go higher depending on the economic
data."
For the week, the indexes notched gains, with the S&P snapping a three-week losing streak and the Dow enjoying its first weekly advance since late January. The week also saw the benchmark S&P 500 break through its 50- and 200-day moving averages, two closely watched technical levels. "It’s an indication that a shift is transpiring," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "And a lot of people are suspect of it, but they don't want to be left behind." Economic data released on Friday showed steady demand for services, with purchasing managers' indexes (PMI) from the Institute for Supply Management and S&P Global indicating that activity in the sector continues to expand even as input prices cool. "Investors saw what they wanted in the ISM data, which was basically healthy growth with slowing prices," Carter added. "It suggests they are willing to stay on the plane as they are less worried about the landing." Unofficially, the Dow Jones Industrial Average rose 386.78 points, or 1.17%, to 33,390.35, the S&P 500 gained 64.12 points, or 1.61%, to 4,045.47 and the Nasdaq Composite added 226.02 points, or 1.97%, to 11,689.01. Fourth-quarter earnings season is on the final stretch, with all but seven of the companies in the S&P 500 having reported. Results for the quarter have beaten consensus estimates 68% of the time, according to Refinitiv. Still, on aggregate, analysts believe S&P 500 earnings will have fallen 3.2% in the fourth quarter compared to the prior year, and expect negative year-on-year numbers for the first two quarters of 2023. This would imply the S&P 500 entered a three-quarter earnings recession in the closing months of 2022, per Refinitiv.
Apple Inc jumped after Morgan Stanley said the
stock could rally more than 20% this year on a potential
hardware subscription.
Broadcom Inc surged after the chipmaker forecast
second-quarter revenue above analysts' estimates as increased
investments in AI spurred demand for chips.
Among losers, Costco Wholesale Corp slipped on the
heels of its revenue miss, as high inflation dampened consumer
demand.
Chipmaker Marvell Technology Inc lost ground in the
wake of the company's quarterly profit miss and disappointing
revenue forecast.
(Reporting by Stephen Culp; Additional reporting by Sruthi
Shankar in Bengaluru; Editing by Cynthia Osterman)
