NEW YORK (AP) — Stocks rallied Thursday to recoup recent losses as the countdown to a highly anticipated interest rate speech nears zero.
The S&P 500 rose 0.7% in another relatively quiet day of trading. Stocks moved through mostly modest gains and losses from Monday to Monday worst day in monthsas traders do not make big moves in general.
The Dow Jones Industrial Average was up 112 points, or 0.3%, at 33,081 as of 2:40 p.m. ET, while the Nasdaq Composite was 1% higher.
Treasury yields fell to ease pressure on Wall Street after several economic reports. Fewer workers are reported unemployment claims last week than expected, an encouraging sign for the labor market, which has been a mainstay of the economy struggling with high inflation.
Meanwhile, revised figures for the general economy show that its contraction in the spring was not as significant as previously thought. This decreased by 0.6% year-on-yearaccording to the government’s second preliminary reading, softer than the 0.9% given in its original estimate.
The 10-year Treasury yield, which is affected mortgage ratesfell to 3.03% from 3.11% on Wednesday night.
That helped stocks that tend to benefit the most from lower interest rates, such as Internet companies and technology companies. Businesses whose profits tend to be closely tied to the strength of the economy, such as banks and commodity producers, also helped lead the market.
After that, telemedicine service providers were strong Amazon has stopped in-house telemedicine service for employees. Teladoc gained 2.6%.
The losers were several companies that cut their financial forecasts for the year. Software company Salesforce fell 5.1%, while discount retailer Dollar Tree fell 9.7%.
Several retailers recently cut their forecasts, even after reporting higher-than-expected profits for the latest quarter. They are struggling with increased inventories and higher costs, while customers are also under pressure from inflation, especially those on lower incomes.
Wall Street’s focus, however, remains on Jackson HoleWyoming, where economists from around the world gather for an annual symposium.
It has been the site of several market-defining Federal Reserve announcements in the past, and investors are hoping Fed Chairman Jerome Powell will provide some clarity on where interest rates are headed.
The Fed has already raised rates four times this year in its efforts to stem high inflation, most of them by larger than normal hikes, and investors want to hear how receptive it is to expected future hikes. Powell will begin speaking at 10 a.m. ET on Friday, and he could also talk about the Fed’s moves to lift the ” money printer ” it was used during the pandemic to boost the economy.
Stocks have rallied over the summer on hopes that the Fed may go easier on raising interest rates than previously feared, as investors saw signs that the nation’s high inflation may be nearing its peak. The hope was that the Fed would be able to reduce the rate of hikes earlier than expected and ultimately may not raise rates as far as previously thought.
But recent comments from a number of Fed officials have pushed back on that narrative, leading to hopes for more clarity from Powell on Friday.
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