Dec. 1 (Reuters) – Wall Street ended mixed Thursday as a sell-off in Salesforce weighed on the Dow, while traders digested US data that indicated interest rate hikes by the Federal Reserve (US central bank) are paying off.
On Wednesday, the S&P 500 rose more than 3% on optimism that the Federal Reserve may moderate its campaign to raise interest rates.
Manufacturing activity in the United States contracted in November for the first time in two and a half years as higher borrowing costs hit demand for goods, the data showed, evidence that the Fed’s interest rate hike has cooled the economy.
The personal consumption expenditures (PCE) price index rose 0.3%, the same as in September, and over the 12 months through October, the index rose 6.0% after advancing 6.3% the previous month.
Excluding the volatile food and energy components, the PCE price index rose 0.2%, one-tenth less than expected, after rising 0.5% in September.
“On a normal day, the data package this morning would be quite risky, but after yesterday’s rally, I think it’s not good enough to drive another move higher,” said Ross Mayfield, investment strategy analyst at Baird. Wednesday’s rally drove the S&P 500 (.SPX) above the 200-day moving average for the first time since April after Fed Chair Jerome Powell said it was time to slow down the pace of rate hikes.
Traders now see a 79% chance that the Fed will raise the key rate by 50bp in December and a 21% chance that it will raise rates by 75bp.
Salesforce Inc (CRM.N) It plunged after the software maker said Brett Taylor would step down as co-CEO in January.
Dollar General Corporation (DG.N) fell after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp (COST.O) It fell after the membership-only retail chain reported slowing sales growth in November.
According to preliminary data, the S&P 500 index (.SPX) It lost 2.31 points, or 0.06%, to close at 4,077.80 points, while the Nasdaq Composite lost. (nineteenth) It rose 15.22 points, or 0.13%, to 11,483.21 points. Dow Jones Industrial Average (.DJI) It fell 193.24 points, or 0.56%, to 34,397.42 points.
A report from the Labor Department on Thursday showed that initial claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 225,000 for the week ending November 26.
Investors are now awaiting Friday’s non-farm payrolls data for clues as to how the rate hike will affect the labor market.
With a month left in 2022, the S&P 500 is down about 14% year-to-date, and the Nasdaq has lost about 27%.
Additional reporting by Anika Biswas and Shriyashi Sanyal in Bengaluru, and Noel Randewich in Oakland, California. Editing by Shonak Dasgupta and David Gregorio
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