May 27th, 2024

Stock market today: Wall Street rises to pull S&P 500 back within 1% of its record

By Stan Choe, The Associated Press on May 9, 2024.

NEW YORK (AP) – U.S. stocks rose to pull the S&P 500 back within 1% of its record following a rough April. The index climbed 0.5% Thursday. The Dow Jones Industrial Average rose 0.8%, and the Nasdaq composite gained 0.3%. Helping to keep the market steady was a report showing a rise in the number of U.S. workers applying for unemployment benefits, though it remains low compared with history. Treasury yields erased earlier gains after the report raised hopes that the Federal Reserve will cut interest rates this year. Across the Atlantic, the Bank of England hinted a cut to its key rate may come soon.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) – U.S. stocks are rising Thursday to pull the S&P 500 back within 1% of its record following a rough April.

The S&P 500 was 0.5% higher in late trading. The Dow Jones Industrial Average was up 321 points, or 0.8%, with less than an hour remaining in trading, and the Nasdaq composite was 0.3% higher.

A report showing a pickup in layoffs helped to prop up the market. The number of workers applying for unemployment benefits rose by more last week than economists expected, though it remains relatively low compared with history.

That could be a sign the economy can pull off a hoped-for balancing act of staying solid enough to avoid a bad recession, but not so strong that it puts upward pressure on inflation. Treasury yields erased earlier gains immediately after the report’s release, indicating expectations for the Federal Reserve to deliver long-sought cuts to interest rates later this year.

Elsewhere on Wall Street, some stocks swung sharply following their latest earnings reports.

Equinix jumped 11.9% after reporting stronger profit for the latest quarter than analysts expected. The company, which runs data centers around the world, also said that an independent investigation led by its board found no accounting inconsistencies or errors that would require financial restatements. An investment firm earlier had accused it of “major accounting manipulation.”

Yeti Holdings rose 13.6% after reporting better profit for the latest quarter than expected thanks to stronger sales for its drinkware and coolers and equipment. It also raised its forecast for full-year earnings per share. Like several other companies, it’s plowing cash into buying back its own stock, which boosts per-share profit for existing investors.

Cheesecake Factory gained 5.4% after topping expectations for profit. The results were encouraging following some recent warnings by big food and drink companies about how much pressure their lower-income customers are feeling.

Airbnb sank 6.5% despite also topping expectations for profit and revenue. It gave a forecasted range for revenue in the current quarter whose midpoint fell short of analysts’. It said an earlier Easter pulled more of its business this year into the first quarter from the second quarter.

Beyond Meat, the maker of plant-based meat substitutes, fell 13.9% after it posted a much worse loss than analysts expected as demand continued to crater.

In the bond market, the yield on the 10-year Treasury eased to 4.45% from 4.50% late Wednesday. The two-year yield, which more closely tracks expectations for the Fed, slipped to 4.81% from 4.84% late Wednesday.

A smooth auction of 30-year Treasury bonds also helped to keep yields stable.

Treasury yields have largely been easing since Federal Reserve Chair Jerome Powell said last week that the central bank remains closer to cutting its main interest rate than hiking it, despite a string of stubbornly high readings on inflation this year. A cooler-than-expected jobs report on Friday, meanwhile, suggested the U.S. economy could pull off the delicate balancing act and avoids getting too cold or too hot.

It could take a while for inflation in the United States to get all the way back to the Federal Reserve’s 2% target, even with the Fed’s main interest rate at its highest level in more than two decades. Economists at S&P Global Market Intelligence downgraded slightly their forecasts for U.S. economic growth in 2025 and 2026, and they say it may not be until 2027 that the Fed’s main measure of inflation hits its target on a sustained basis.

In stock markets abroad, indexes rose in London and other markets in Europe after the Bank of England hinted it may soon cut its key interest rate from a 16-year high.

In Asia, indexes were mixed. They climbed 1.2% in Hong Kong and 0.8% in Shanghai after China reported its exports rose 1.5% in April from a year earlier, while imports jumped 8.4%. The renewed growth suggests a stronger recovery in demand than earlier data had suggested.

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AP Writers Matt Ott and Zimo Zhong contributed.

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