US close: Stocks higher following better-than-expected data

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Wall Street stocks closed higher on Wednesday as better-than-expected macro data and comments from a top Fed official boosted sentiment.

At the close, the Dow Jones Industrial Average was up 1.29% at 32,812.50, while the S&P 500 was 1.56% firmer at 4,155.17 and the Nasdaq Composite saw out the session 2.59% stronger at 12,668.16.

The Dow closed 416.33 points higher on Wednesday, reversing losses recorded in the previous session amid heightened US-China tensions amid House Speaker Nancy Pelosi's arrival in Taiwan.

One of the session's primary focusses was news that activity in the US services sector accelerated unexpectedly in July, the results of a closely-followed survey revealed. The Institute for Supply Management's services sector Purchasing Managers' Index improved from a reading of 55.3 for June to 56.7 in July. Economists had pencilled-in a decline to 53.9 for the headline index.

Remarks from St Louis Fed chief James Bullard also boosted sentiment after he said, thanks to the credibility won by central banks since the 1970s, that the central bank may be able to lower inflation in an orderly fashion while achieving a relatively soft landing.

Bullard emphasised that the Fed was committed to its price stability mandate, noting how it had raised official interest rates "sharply" and started down the road on quantitative tightening.

Also on the macro front, US mortgage applications rose 1.2% in the final week of July, according to the Mortgage Bankers Association, the first increase in five weeks, with the refinance and purchase index advancing 1.5% and 1.0%, respectively.

Elsewhere, services sector activity in the US slumped during the previous month with output falling at its fastest pace since May 2020, revised data for a survey of sector conditions revealed. S&P Global's services sector Purchasing Managers' Index slipped from a reading of 52.7 for June to 47.3 in July (Preliminary 47.0). New orders on the other hand returned to growth, after a marginal fall in June, but at a much slower pace than seen earlier in the year.,

Finally, the Institute for Supply Management's non-manufacturing PMI increased unexpectedly to 56.7 in July, up from 55.3 in June, while factory orders jumped 2% month-on-month in June, according to the Census Bureau, extending an upwardly revised 1.8% rise in May and well above market forecasts for a 1.1% increase.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Walt Disney Co. (DIS) $109.02 4.12%
Apple Inc. (AAPL) $166.13 3.82%
Salesforce.Com Inc. (CRM) $189.65 3.19%
Microsoft Corp. (MSFT) $282.47 2.78%
American Express Co. (AXP) $155.43 2.53%
Nike Inc. (NKE) $114.28 2.25%
Procter & Gamble Co. (PG) $144.88 2.06%
Boeing Co. (BA) $166.64 2.06%
Home Depot Inc. (HD) $306.37 1.88%
Cisco Systems Inc. (CSCO) $45.71 1.76%