January 27, 2023

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Wall Street ends mixed;  Salesforce selling pressure on Dow

Wall Street ends mixed; Salesforce selling pressure on Dow

  • Salesforce drops co-CEO exit plan
  • Dollar General is declining due to the annual dividend offer cut
  • US manufacturing contracted for the first time in 2-1/2 years in November
  • Indexes end: S&P 500 -0.08%, Nasdaq +0.13%, Dow -0.56%

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 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.

US manufacturing activity contracted in November for the first time in 2-1/2 years as higher borrowing costs weighed on 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.

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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 fell 8.3% after the software maker said Brett Taylor would step down as co-CEO in January.

Dollar General Corporation (DG.N) fell 7.5% after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp (COST.O) It fell 6.6% after the membership-only retail chain reported slowing sales growth in November.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, November 29, 2022. REUTERS/Brendan McDiarmid

The S&P 500 fell by 0.08%, ending the session at 4,076.79 points.

The Nasdaq rose 0.13% to 11,482.45 points, supported by gains of more than 1% each in Nvidia. (NVDA.O) and Facebook Owner Profile Platforms (META.O).

The Dow Jones Industrial Average fell 0.56% to 34,396.53 points, weighed down by Salesforce.

Of the 11 S&P 500 sector indices, seven are down, led by financial indices on a decline. (.SPSY)down 0.71%, followed by a loss of 0.47% in consumer staples (.SPLRCS).

A US Labor Department report 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%.

The number of advanced issues outnumbered the falling issues of the S&P 500 (.AD.SPX) at a ratio of 1.1 to one.

S&P 500 posted 32 new highs and no new lows; The Nasdaq Index posted 118 new highs and 91 new lows.

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Trading volume on US stock exchanges was relatively heavy, with 11.7 billion shares traded, compared to an average of 11.3 billion shares during the previous 20 sessions.

(Reporting by Anika Biswas and Shriyashi Sanyal in Bengaluru, and Noel Randewich in Oakland, California; Editing by Shonak Dasgupta and David Gregorio

Our standards: Thomson Reuters Trust Principles.