By David French
(Reuters) – Wall Street ended a turbulent Thursday in positive territory, with the S&P 500 suffering a four-day losing streak as investors grappled with how interest rate policy might affect the US economy.
Stock markets have been volatile this year, falling in February after a strong January as investors tried to figure out what the Federal Reserve would do with interest rates. Hawkishe’s comments from policymakers were peppered with data pointing to a strong American economy.
On Thursday, the Labor Department said the number of Americans filing new jobless claims fell unexpectedly last week, reflecting tight labor market conditions.
A separate report confirmed that the economy grew solidly in the fourth quarter, although rising inventory levels accounted for much of the gain.
According to the government’s second estimate, US gross domestic product rose 2.7% in the fourth quarter. Economists forecast an increase of 2.9%.
“If you’re a bull, you can pull out a lot of things that are supportive, and if you’re a bear, there’s a lot of things that suggest they’re supportive,” said Jack Janasiewicz, senior portfolio strategist at Natixis Investment Managers Solutions .
“There are so many cross currents going in very different directions, I think it’s very difficult to draw on one or two things. That creates a lot of uncertainty and we trade range es as a result.”
The S&P traded below its 50-day moving average of 3,980 for part of the day before recovering in the afternoon to finish above 4,000 for the first time this week.
According to Nomura strategist Charlie McElligott, this intraday drop was influenced by large trades in short-term derivatives that put selling pressure on the market.
Nvidia Corp. helped boost buyer confidence and posted positive gains, rising 14% after quarterly sales beat estimates and reported a surge in usage of its chips for AI services.
Other chipmakers also rose, with Broadcom Inc, Intel Corp and Qualcomm Inc all gaining between 0.6% and 1.8%. The Philadelphia SE Semiconductor Index rose 3.3%.
The Dow Jones Industrial Average was up 108.82 points, or 0.33%, to 33,153.91, the S&P 500 was up 21.27 points, or 0.53%, to 4,012.32 and the Nasdaq Composite was up 83.33 points, or 0.72% to 11,590.40.
Seven of the 11 major sectors of the S&P 500 rose. Higher crude oil prices pushed energy up 1.3% and the index halted its losing run at seven. This was the biggest drop since an eight-session slump in March 2017.
Communication Services was the biggest loser, down 0.7%. This was the fifth straight decline, which matched another run of five losses in October. It was weighted by Netflix Inc, which fell 3.4% on reports that the streaming service cut subscription prices in 30 countries.
Among other stocks, eBay Inc posted its biggest one-day decline since Sept. 13, down 5.2% after warning of weak demand in the first half.
Moderna Inc fell 6.7% to its lower close since Nov. 3 after the vaccine maker reiterated its $5 billion annual sales guidance for its COVID-19 vaccines, though fourth-quarter sales beat estimates.
Bumble Inc, however, rose 7.5%. The owner of the eponymous dating app forecast annual revenue growth above market estimates on optimism about rising paying users.
Volume on US exchanges was 10.43 billion shares compared to the average of 11.59 billion for the entire session over the last 20 trading days.
The S&P 500 posted 7 new 52-week highs and 3 new lows; the Nasdaq Composite posted 59 new highs and 128 new lows.
(Reporting by Johann M. Cherian and Sruthi Shankar in Bengaluru and David French in New York; Editing by Savio D’Souza, Arun Koyyur, Anil D’Silva and David Gregorio)
