Wall Street rally, on course for weekly gains as Treasury yields fall

NEW YORK, March 3 (Reuters) – Wall Street moved ahead on Friday towards the end of an up and down week as US Treasury yields fell and economic data helped investors see past the growing likelihood that the Federal Reserve will ease its restrictive policy. maintain in place longer than expected.

All three US stock indices were positive, led by techie Nasdaq, which received a solid boost from market-leading rate-sensitive megacaps. US Treasury yields fell after comments from Fed officials that allayed inflation and interest rate fears.

For this week, the indices appear to be on track to make gains, with the S&P breaking a three-week losing streak and the Dow posting its first weekly gain since late January.

This week also saw the benchmark S&P 500 break through its 50- and 200-day moving averages, two closely monitored technical levels.

“You have a market that is oversold, has traded to major support levels and is above the resistance level of the 50-day moving average,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “It’s an indication that there’s a shift going on. And a lot of people are suspicious about it, but they don’t want to be left behind.”

Economic data released Friday showed steady demand for services, with purchasing managers’ indices (PMI) from the Institute for Supply Management and S&P Global indicating that activity in the sector will continue to grow even as input prices cool.

“Nothing indicates we are going off a cliff,” Pavlik added. “The labor market is still very strong and this morning’s numbers point to a soft landing.”

At 1:56 PM ET, the Dow Jones Industrial Average (.DJI) was up 279.29 points, or 0.85%, to 33,282.86, the S&P 500 (.SPX) gained 51.18 points, or 1.29% , to 4,032.53 and the Nasdaq Composite (.IXIC ) added 189.80 points or 1.66% to 11,652.78.

Of the 11 major sectors of the S&P 500, all sectors except consumer staples (.SPLRCS) were up, with communications services (.SPLRCL) and consumer discretionary (.SPLRCD) posting the largest percentage gains.

The fourth-quarter earnings season is drawing to a close, with all but seven companies in the S&P 500 reporting. According to Refinitiv, results for the quarter beat consensus estimates 68% of the time.

Still, analysts think the S&P 500’s earnings will be down 3.2% in the fourth quarter compared to the previous year, and expect negative year-on-year numbers for the first two quarters of 2023. This would mean that the S&P 500 experienced a three-quarter earnings recession in the closing months of 2022, according to Refinitiv.

Apple Inc (AAPL.O) rose 2.9% after Morgan Stanley said the stock could gain more than 20% this year on a potential hardware subscription.

Broadcom Inc (AVGO.O) rose 5.5% after the chipmaker forecast second-quarter revenue above analyst estimates as increased investment in AI fueled demand for chips.

Among the losers, Costco Wholesale Corp. (COST.O) fell 2.8% on lost sales as high inflation dampened consumer demand.

Chipmaker Marvell Technology Inc (MRVL.O) fell 6.3% in the wake of the company’s quarterly profit and disappointing revenue forecast.

Emerging issues outnumbered declining issues on the NYSE by a ratio of 4.63 to 1; on Nasdaq, a ratio of 2.33 to 1 was in favor of progress.

The S&P 500 posted 21 new highs in 52 weeks and two new lows; the Nasdaq Composite recorded 73 new highs and 49 new lows.

Reporting by Stephen Culp; Additional reporting by Sruthi Shankar in Bengaluru; Edited by Cynthia Osterman

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