Wall Street gains ahead of busy week of closely watched economic reports
Stocks rose broadly Monday on Wall Street as markets shift their attention from the Federal Reserve to more corporate and economic reports.
The gains extended the broader market’s winning streak after it notched its first weekly gain since July. The Standard & Poor’s 500 rose 27.60 points, or 0.6%, to 4,433.31. The benchmark index is still on track to close out August with a loss.
The Dow Jones industrial average rose 213.08 points, or 0.6% to 34,559.98. The Nasdaq rose 114.48 points, or 0.8%, to 13,705.13.
Wall Street is wrapping up its latest round of earnings reports, which have mostly beaten analysts’ expectations. Still, overall profits for the S&P 500 have contracted about 4% under the weight of persistent inflation.
Best Buy, Costco and Dollar General are among some of the bigger retailers that will report their results this week.
3M jumped 5.2% following reports that the company had agreed to a $5.5-billion settlement over faulty earplugs, a lower figure than expected. Boston Scientific rose 6% after giving investors an encouraging update on a study for a heart device.
Shares of Hawaiian Electric jumped 44.6% as the utility pushed back against accusations that it is responsible for causing the wildfire that devastated the community of Lahaina. The company said power to the lines in the area of the fire had been cut off hours before the blaze began, refuting an allegation in a lawsuit filed last week by Maui County. The shares are still down about 63% over the last three weeks.
Investors have a busy week ahead, full of economic reports that could shed more light on the employment market and whether inflation is still cooling. The latest data could provide more clues about whether the Fed is likely to hold interest rates steady or raise them again before the year closes.
Wall Street will get an update Tuesday on consumer confidence, which jumped sharply in July and is expected to remain strong in August.
The government will issue its July report on job openings Tuesday and its broader jobs report for August on Friday. The job market is being closely watched because it has remained strong amid hot inflation and is credited with acting as a bulwark against a recession.
Investors and economists will be focusing closely on the government’s latest inflation update Thursday. The report on personal consumption expenditures is the Fed’s preferred measure as it tries to rein inflation back to 2%. The PCE report showed an inflation rate of 3% in June and the July report is expected to show it rose slightly to 3.3%. Overall, it’s down from a high of 7% a year earlier.
Investors closed last week relieved that Fed Chair Jerome H. Powell said the central bank would “proceed carefully” on interest rates.
The continued strength of the U.S. economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said in a closely watched speech that also highlighted the uncertain nature of the economic outlook.
“The general consensus is that we’re getting closer to the end of the interest rate hiking cycle,” said Brian Price, head of investment management for Commonwealth Financial Network.
The central bank has already hiked its main interest rate to the highest level since 2001 in its drive to grind down high inflation. That was up from virtually zero early last year. The Fed held rates steady at its last meeting, but has said it could raise rates again if it considers it necessary to fight persistent inflation.
Wall Street is betting that the Fed will hold rates steady again at its September meeting, according to CME Group’s FedWatch tool. Bets are nearly evenly split, though, on whether it will raise rates one more time before 2023 closes.
Powell on Friday said upcoming decisions will be based on what incoming data reports say about the economy.
The yield on the 10-year Treasury slipped to 4.21% from 4.24% late Friday. The yield on the two-year Treasury, which more closely tracks expectations for the Fed, fell to 5.06% from 5.08% late Friday.
From his office in Pasadena, Dominic Ng watched as California banks fell like dominoes — first crypto-friendly Silvergate Capital in early March, then Silicon Valley Bank days later, followed by San Francisco’s First Republic Bank at the beginning of May.
Markets in Asia rose broadly. China will no longer require a negative COVID-19 test result for incoming travelers, a milestone in its reopening to the rest of the world after an isolation that began with the country’s borders closing in 2020.
European markets also gained ground.
AP writers Yuri Kageyama and Matt Ott contributed to this report.
