By DAMIAN J. TROISE and STAN CHOE
AP Business Writers
NEW YORK (AP) — Stocks are closing higher on Wall Street, clawing back more of their recent losses, as the countdown clicks closer to zero for a highly anticipated speech about interest rates. The S&P 500 rose 1.4% Thursday. Stocks have drifted through gains and losses since tumbling Monday to their worst day in months, as traders hold off on making big moves overall. Wall Street’s focus is on an economic summit at Jackson Hole, Wyoming, which has been the setting for market-defining announcements by the Federal Reserve in past years. The Fed’s chair is scheduled to speak Friday morning.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Stocks are rising Thursday to claw back more of their recent losses, as the countdown clicks closer to zero for a highly anticipated speech about interest rates.
The S&P 500 was 0.7% higher in another relatively quiet day of trading. Stocks have been drifting through mostly modest gains and losses since tumbling Monday to their worst day in months, as traders hold off on making big moves overall.
The Dow Jones Industrial Average was up 112 points, or 0.3%, at 33,081, as of 2:40 p.m. Eastern time, and the Nasdaq composite was 1% higher.
Treasury yields were easing to let off some of the pressure on Wall Street following the release of several reports on the economy. Fewer workers applied for jobless claims last week than expected, an encouraging sign for a jobs market that has been the main pillar for an economy struggling under high inflation.
A revised reading on the overall economy, meanwhile, suggested that its contraction during the spring wasn’t quite as bad as earlier thought. It shrank 0.6% on an annualized basis, according to the government’s second preliminary reading, milder than the 0.9% given in its initial estimate.
The 10-year Treasury yield, which affects mortgage rates, fell to 3.03% from 3.11% late Wednesday.
That helped stocks that tend to benefit the most from lower interest rates, such as internet and technology companies. Businesses whose profits tend to be tied closely to the strength of the economy, such as banks and producers of raw materials, were also helping to lead the market.
Telehealth services providers were strong after Amazon shut down its in-house telemedicine service for employees. Teladoc gained 2.6%.
On the losing end were several companies that trimmed their financial forecasts for the year. Software company Salesforce fell 5.1%, and discount retailer Dollar Tree fell 9.7%.
Several retailers have cut their outlooks recently, even after reporting stronger profit for the latest quarter than expected. They’re struggling with swelling inventories and higher costs, all while customers likewise get squeezed by inflation, particularly lower-income ones.
Wall Street’s focus, though, remains on Jackson Hole, Wyoming, where economists from around the world are gathering for an annual symposium.
It’s been the setting for several market-defining announcements by the Federal Reserve in the past, and investors are hoping Fed Chair Jerome Powell will offer some clarity about where interest rates are heading.
The Fed has already raised rates four times this year in its efforts to halt high inflation, with most of them bigger than the usual hike, and investors want to hear how it’s leaning for future expected increases. Powell will begin speaking at 10 a.m. Eastern time Friday, and he could also talk about the Fed’s moves to put into reverse the “ money printer ” it used during the pandemic to goose the economy.
Stocks had jumped through the summer on hopes that the Fed may go easier on its interest rate hikes than earlier feared, as investors saw signs that the nation’s high inflation may be close to its peak. The hope was that the Fed could downshift the size of its increases sooner than expected and may not ultimately raise rates as far as earlier thought.
But recent comments from a spate of Fed officials have pushed back on that narrative, leading to the hopes for more clarity from Powell on Friday.
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