US: Stocks edge up as markets work to shrug off Fed concerns
WALL Street stocks picked up Friday after a rocky session following positive results from retailers and as markets tried to shake off concerns of further interest rate hikes by the US central bank.
The Dow Jones Industrial Average rose 0.6 per cent to close at 33,745.69, while the broad-based S&P 500 edged up 0.5 per cent to 3,965.34.
The tech-rich Nasdaq Composite Index was essentially flat, finishing at 11,146.06.
Investors have been downbeat after a number of Federal Reserve officials have stressed the message that more rate hikes will be needed to bring down surging inflation, feeding fears of a recession in the world’s biggest economy.
Boston Fed Bank President Susan Collins was the latest to do so in a speech Friday, although she said the central bank’s “intent is not a significant downturn.”
Industry data released Friday showed the interest rate sensitive real estate market is feeling the impact of the Fed’s aggressive policy actions, as existing home sales declined for a ninth straight month.
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Combined with other reports, the data “were very negative, all pointing to a recession,” said Peter Cardillo of Spartan Capital Securities.
Even so, “the market is trying to shrug off the hawkish Fed talks that we had in the week,” he said. Edward Moya, senior market analyst at Oanda, said while central bankers have been united in talking about further tightening on the horizon, “Wall Street remains convinced that they will pivot and probably cut rates at some point around the end of next year.”
Good news in the retail sector from companies like Gap and Foot Locker – whose results beat expectations – also helped sentiment.
Gap gained 7.4 per cent on Friday while Foot Locker jumped 8.6 per cent.
But e-commerce giant Amazon slipped 0.8 per cent after the company announced it will lay off workers, with reports of about 10,000 job cuts planned. AFP
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