(In paragraph 6, corrects title to chief investment officer
instead of deputy chief investment officer)
Dow up 0.78%, S&P 500 up 1.29%, Nasdaq up 1.90%
Microsoft up on investment in AI
DuPont climbs on strong Q4 profit
Boeing up on announcement of layoffs
Feb 7 (Reuters) - U.S. stocks rallied to a convincingly
higher close on Tuesday, but trade was choppy as investors
digested comments from Federal Reserve Chair Jerome Powell about
how long the central bank may need to tame inflation.
Powell said 2023 should be a year of "significant declines
His comments renewed investor hopes for less aggressive
monetary policy that wavered after a strong U.S. jobs report
last Friday. "We didn't expect it to be this strong," Powell
said at the Economic Club of Washington, referring to the
nonfarm payrolls report for January, but it "shows why we think
this will be a process that takes quite a bit of time."
"Powell expects they're not going to be cutting rates
anytime soon, but that there is a good path, that theyre
accomplishing what they need to accomplish, said Shawn Cruz,
head trading strategist at TD Ameritrade.
Wall Street's main indexes fluctuated wildly during and
after Powell's remarks, and analysts said volatility is unlikely
to dissipate soon.
"Until we see softening and inflation throughout the economy
and throughout the globe, it's going to be hard to push the
markets up in a decisive fashion," said Carol Schleif, chief
investment officer at BMO Family Office.
The tech-heavy Nasdaq rallied on news form Microsoft
Corp, and the S&P 500 also got a boost. The
company's shares rose 1.29% as it unveiled an integration of
ChatGPT, a chatbot from OpenAI, into its products.
Following Powell's comments, Morgan Stanley said it added 25
basis point to its forecast for the May policy meeting, but
continued to expect the first 25 basis point rate cut for
Last week, the Fed raised interest rates by 25 basis points,
with markets now pricing in a peak rate above 5% after Friday's
strong jobs data.
U.S.-listed shares of Baidu Inc soared 12.18% as
the Chinese search engine said it would conclude testing of its
ChatGPT-style project "Ernie Bot" in March.
Most sectors on the S&P 500 ended higher. The energy sector
the top gainer as crude prices surged more than 3% on
Powell's remarks. The technology and communication
services sectors were also among top gainers.
Among top gainers on the Dow Jones Industrial Average
, Boeing Inc went up 3.84% after the U.S.
planemaker confirmed it expects to cut about 2,000 white-collar
The Dow Jones Industrial Average rose 265.67 points,
or 0.78%, to 34,156.69, the S&P 500 gained 52.92 points,
or 1.29%, to 4,164 and the Nasdaq Composite added 226.34
points, or 1.9%, to 12,113.79.
Volume on U.S. exchanges was 11.98 billion shares, in line
with the full session over the last 20 trading days.
On Monday, U.S. stock indexes were dragged by views that
rates would stay higher for longer. Still, all three major
averages are in the black for 2023, with the Nasdaq adding over
15%, led by a revival in battered mega-cap growth stocks.
So far, more than half of the companies on the S&P 500 have
reported quarterly earnings, with 69.1% of them beating
expectations, according to Refinitiv. Still, analysts expect
fourth-quarter earnings to decline 3.1%.
DuPont De Nemours Inc jumped 7.50% on a
higher-than-expected quarterly profit supported by higher
pricing for its products.
Bed Bath & Beyond plunged almost 50% as the
home-goods retailer sought to raise $1 billion in a last-ditch
effort to avoid bankruptcy. The company completed the equity
offering after the close of trading.
Later on Tuesday, U.S. President Joe Biden will deliver the
annual State of the Union address to a joint session of
Advancing issues outnumbered declining ones on the NYSE by a
1.68-to-1 ratio; on Nasdaq, a 1.42-to-1 ratio favored advancers.
The S&P 500 posted 5 new 52-week highs and 2 new lows; the
Nasdaq Composite recorded 90 new highs and 31 new lows.
(Reporting by Carolina Mandl in New York, Johann M Cherian and
Shubham Batra in Bengaluru, additional report by Chuck
Mikolajczak, in New York
Editing by Anil D'Silva, Matthew Lewis and David Gregorio)