Wall St ends higher, Cisco Systems jumps after forecast

Date:

  • Investors Still Judging Wednesday’s Fed Minutes
  • Kohl’s slashes 2022 predictions
  • Indices: Dow up 0.1%, S&P 500 up 0.2%, Nasdaq up 0.2%

NEW YORK, Aug. 18 (Reuters) – US stocks closed higher on Thursday as an optimistic sales forecast from Cisco Systems helped lift the technology sector, while data showed the economy remained relatively strong.

Investors were still reviewing Wednesday’s minutes of the Federal Reserve’s July meeting, which they initially saw as supporting a less aggressive central bank stance.

But the minutes did not clearly indicate the pace of rate hikes and showed policymakers determined to raise rates to tame inflation. read more

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“We’re at a point where people are trying to judge whether the inevitable higher interest rates will choke the market’s upside,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

“There are actually two camps – one that thinks the worst is over and continues to buy this sell-off, and the camp that feels the worst is ahead of us and this is kind of a bear market rally that will pull back.”

Traders expect a greater chance of a 50 basis point increase in borrowing costs in September rather than a third 75 basis point increase. FEDWATCH read more

Meanwhile, Cisco’s (CSCO.O) share gained 5.8% and was among the biggest positives on the three major indices after it gave an optimistic forecast for first-quarter sales late Wednesday as a COVID-19 recovery in China reduced supply chain shortages . read more

The Dow Jones Industrial Average (.DJI) rose 18.72 points or 0.06% to 33,999.04, the S&P 500 (.SPX) gained 9.7 points or 0.23% to 4,283.74 and the Nasdaq Composite ( .IXIC) added 27.22 points, or 0.21% to 12,965.34.

Volume on the US stock exchanges was most recent at 9.43 billion shares, the lowest for the year so far.

Supporting the view that the Fed may need to be more aggressive, Thursday showed solid momentum on the US economic front.

The Philadelphia Federal Reserve’s monthly manufacturing index rose to 6.2 this month from a negative 12.3 in July, surpassing all 30 estimates in a poll by Reuters economists.

Also on Thursday, a series of Federal Reserve officials said the Fed must continue to raise borrowing costs to contain high inflation, though they debated how soon and how high they should be raised. read more

The Fed has raised its benchmark interest rate by 225 basis points so far this year.

The focus could now turn to the Fed’s annual Jackson Hole symposium late next week.

Other winners in high-growth stocks were Nvidia (NVDA.O), which rose 2.4%.

Among the day’s decliners, shares of Kohl’s Corp (KSS.N) fell 7.7% after the retailer lowered its full-year sales and earnings forecasts. read more Target Corp (TGT.N) fell 1.3%, contributing to losses from Wednesday when it reported a larger-than-expected 90% drop in quarterly earnings.

After a brutal start to the year, shares have risen since mid-June, partly due to positive gains.

With the recent big move and second-quarter earnings close, the market may be “in a little equilibrium,” Meckler said.

The number of emerging issues outpaced the number falling on the NYSE by a ratio of 1.36 to 1; on Nasdaq, a 1.18-to-1 ratio favored the advanced.

The S&P 500 posted 5 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 62 new highs and 63 new lows.

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Additional reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Deepa Babington

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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