US close: Stocks buoyant as central banks pause rates

By Sharecast News

Sharecast News | 03 Nov, 2023

Updated : 00:02

15:25 05/11/24

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Wall Street trading saw a surge in US stock values on Thursday, driven by investor optimism surrounding the Federal Reserve's monetary policies.

The Dow Jones Industrial Average recorded a notable increase of 1.7%, closing at 33,839.08 points.

Similarly, the S&P 500 index saw a robust gain of 1.89%, reaching 4,317.78 points, while the Nasdaq Composite climbed by 1.78% to settle at 13,294.19 points.

In the foreign exchange market, the dollar was last up 0.06% on sterling, trading at 82p.

It also inched up by 0.04% against the euro to 92.19 euro cents, while it managed a minimal rise of 0.02% against the yen to change hands at JPY 150.48.

“Stock markets have a definite groundhog feel to them today, as once again hopes of a peak in interest rates have seen stocks rally,” said IG chief market analyst Chris Beauchamp earlier.

“This rally comes almost on cue in seasonality terms but is doubtless based on expectations that rates will pause here and, in due course, come down.

“Investors have been disappointed before on this front, however, so they need to resist the temptation to charge back into stocks too quickly.”

US jobless claims rise, BoE Keeps Rates Steady

In economic news, the Labor Department reported an increase in the number of Americans filing for unemployment benefits last week.

Initial jobless claims rose by 5,000 from the previous week's revised figure, reaching 217,000.

That exceeded analysts' expectations, who had anticipated a level of 210,000.

Additionally, the four-week moving average, considered a more reliable indicator, climbed to 210,000, up 2,000 from the prior week's level, which itself was revised up by 500 to 208,000.

Meanwhile, the Bank of England (BoE) announced its decision to maintain interest rates, in line with widely anticipated expectations.

It marked the second consecutive meeting where rates remained unchanged, following 14 consecutive rate hikes starting from December 2021 when rates stood at 0.1%.

The BoE retained its GDP growth projection of 0.5% for the current year but downgraded its outlook for the next year to zero growth from the previously forecasted 0.5%.

It also revised its estimate for consumer price inflation in the fourth quarter, now expecting it to be around 4.6%, down from the earlier projection of 4.9%.

In the eurozone, manufacturing faced another challenging month in October, with the HCOB eurozone manufacturing purchasing managers' index (PMI) witnessing a notable decline.

The PMI for October registered at 43.1, down from September's 43.4, marking a three-month low.

Simultaneously, the output index remained unchanged at 43.1.

HCOB reported a significant contraction in new orders during October, one of the most severe on record, contributing to a substantial drop in factory production.

Starbucks and Disney shares in focus

In equity markets, Starbucks saw a remarkable uptick in its stock price today, surging by 9.48%.

That came in response to Starbucks' quarterly earnings report, which exceeded expectations. The company reported an 8% increase in same-store sales, driven by improvements in average customer order sizes and increased foot traffic.

Elsewhere, Walt Disney Co witnessed a 2.74% increase in its stock price.

The rise was attributed to Disney's announcement that it would acquire Comcast's minority stake in the streaming service Hulu for $8.6 billion.

That would grants Disney full control over Hulu.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Walgreens Boots Alliance, Inc. (WBA) $21.50 4.22%
Nike Inc. (NKE) $105.08 4.16%
Chevron Corp. (CVX) $148.76 3.32%
Caterpillar Inc. (CAT) $239.12 3.14%
American Express Co. (AXP) $150.85 3.00%
Home Depot Inc. (HD) $294.53 2.76%
Walt Disney Co. (DIS) $83.29 2.74%
Amgen Inc. (AMGN) $266.59 2.20%
Goldman Sachs Group Inc. (GS) $313.76 2.15%
Apple Inc. (AAPL) $177.57 2.07%