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U.S. stocks closed mostly lower on Wednesday but are well on track to record their biggest monthly gains of the year as investors weighed remarks from Federal Reserve officials and hoped for rate cuts next year. The Dow ended in the green, while the S&P 500 and Nasdaq finished in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.1% or 13.44 points to close at 35,430.42 points.
The S&P 500 declined 0.1% or 4.31 points, to finish at 4,550.58 points. Consumer staples and utilities stocks were the worst performers.
The Consumer Staples Select Sector SPDR (XLP) and the Utilities Select Sector SPDR (XLU) each lost 0.8%. The Consumer Discretionary Select Sector SPDR (XLY) declined 0.7%. Six of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq slid 0.2% or 23.27 points to end at 14,285.49 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.29% to 12.98. A total of 11.42 billion shares were traded on Wednesday, higher than the last 20-session average of 10.45 billion. Advancers outnumbered decliners on the NYSE by a 2.06-to-1 ratio. On the Nasdaq, a 1.51-to-1 ratio favored advancing issues.
Q3 GDP Upwardly Revised
All three major indexes are on track to record their biggest monthly gain of the year. The Dow and the S&P 500 are expected to close 7.2% and 8.5% up in November, while the Nasdaq is on track to close 11% higher, to register its best monthly gains since July 2022.
Stocks rallied initially on Wednesday after fresh data showed that third-quarter GDP increased 5.2% at a seasonally adjusted annual rate, which was above the consensus estimate of 5% and up from the initial estimate of 4.9%.
The rally lost steam in the afternoon session after the Fed’s Beige Book survey of its districts indicated a slowdown in economic activity and demand for labor compared to the previous month.
However, the mixed data didn’t impact markets much as the upbeat sentiment persisted through Wednesday.
Shares of General Motors Company ((GM - Free Report) ) jumped 9.4% after the company declared a $10 billion buyback and also raised its dividend.
Bond yields fell further on Wednesday. The 10-year Treasury yield which had hit a 16-year high after peaking above the 5% mark in October, fell to 4.27% for the first time since September, lending further support to stock valuations.
This came amid hopes that easing inflation might make the Federal Reserve not go for another interest rate hike and instead start cutting rates from May next year.
Investors are now expecting a 76% chance that the Fed will go for a 25-basis point rate cut in May 2023, according to CME FedWatch tool. The expectations were further strengthened following Atlanta Fed President Raphael Bostic’s comments. Bostic said that he hopes that the economy will have a softer landing as inflation steadily eases to 2%.
Economic Data
In other economic data released on Wednesday, the consumption numbers or households boosted spending by 3.6% in the third quarter, down from the initial 4% reported earlier.
Wholesale inventories declined 2% in October, declining in eight of the past 10 months, while retail inventories remained unchanged.
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Stock Market News for Nov 30, 2023
U.S. stocks closed mostly lower on Wednesday but are well on track to record their biggest monthly gains of the year as investors weighed remarks from Federal Reserve officials and hoped for rate cuts next year. The Dow ended in the green, while the S&P 500 and Nasdaq finished in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.1% or 13.44 points to close at 35,430.42 points.
The S&P 500 declined 0.1% or 4.31 points, to finish at 4,550.58 points. Consumer staples and utilities stocks were the worst performers.
The Consumer Staples Select Sector SPDR (XLP) and the Utilities Select Sector SPDR (XLU) each lost 0.8%. The Consumer Discretionary Select Sector SPDR (XLY) declined 0.7%. Six of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq slid 0.2% or 23.27 points to end at 14,285.49 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.29% to 12.98. A total of 11.42 billion shares were traded on Wednesday, higher than the last 20-session average of 10.45 billion. Advancers outnumbered decliners on the NYSE by a 2.06-to-1 ratio. On the Nasdaq, a 1.51-to-1 ratio favored advancing issues.
Q3 GDP Upwardly Revised
All three major indexes are on track to record their biggest monthly gain of the year. The Dow and the S&P 500 are expected to close 7.2% and 8.5% up in November, while the Nasdaq is on track to close 11% higher, to register its best monthly gains since July 2022.
Stocks rallied initially on Wednesday after fresh data showed that third-quarter GDP increased 5.2% at a seasonally adjusted annual rate, which was above the consensus estimate of 5% and up from the initial estimate of 4.9%.
The rally lost steam in the afternoon session after the Fed’s Beige Book survey of its districts indicated a slowdown in economic activity and demand for labor compared to the previous month.
However, the mixed data didn’t impact markets much as the upbeat sentiment persisted through Wednesday.
Shares of General Motors Company ((GM - Free Report) ) jumped 9.4% after the company declared a $10 billion buyback and also raised its dividend.
Tech stocks fell on Wednesday, with shares of Meta Platforms, Inc. ((META - Free Report) ) declining 2%. Shares of Microsoft Corporation ((MSFT - Free Report) ) and Netflix, Inc. ((NFLX - Free Report) ) declined 1% and 0.4%. Microsoft has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Bond Yields Retreat
Bond yields fell further on Wednesday. The 10-year Treasury yield which had hit a 16-year high after peaking above the 5% mark in October, fell to 4.27% for the first time since September, lending further support to stock valuations.
This came amid hopes that easing inflation might make the Federal Reserve not go for another interest rate hike and instead start cutting rates from May next year.
Investors are now expecting a 76% chance that the Fed will go for a 25-basis point rate cut in May 2023, according to CME FedWatch tool. The expectations were further strengthened following Atlanta Fed President Raphael Bostic’s comments. Bostic said that he hopes that the economy will have a softer landing as inflation steadily eases to 2%.
Economic Data
In other economic data released on Wednesday, the consumption numbers or households boosted spending by 3.6% in the third quarter, down from the initial 4% reported earlier.
Wholesale inventories declined 2% in October, declining in eight of the past 10 months, while retail inventories remained unchanged.