- Salesforce ends co-CEO exit plan
- Dollar General falls on slashing annual earnings outlook
- US manufacturing contracts for the first time in 2-1/2 years in November
- Indices: S&P 500 -0.09%, Nasdaq +0.14%, Dow -0.59%
Dec.1 (Reuters) – Wall Street was mixed on Thursday as a sell-off in Salesforce weighed on the Dow as traders processed US data suggesting the Federal Reserve’s rate hikes are working.
On Wednesday, the S&P 500 rose more than 3% on optimism that the Fed could moderate its rate hike campaign.
US manufacturing activity contracted in November for the first time in 2.5 years as higher borrowing costs weighed on demand for goods, data showed, evidence that the Fed’s rate hikes have cooled the economy.
The Personal Consumption Price Index (PCE) also rose 0.3%, the same as in September, and over the 12 months through October, the index rose 6.0% after rising 6.3% the previous month.
Excluding the volatile food and energy components, the PCE price index rose 0.2%, a tenth less than expected, after gaining 0.5% in September.
“On a normal day, this morning’s data package would be pretty risky, but after yesterday’s rally, I don’t think it’s good enough to go one step higher,” said Ross Mayfield, investment strategy analyst at Baird. Wednesday’s rally drove the S&P 500 index (.SPX) above its 200-day moving average for the first time since April after Fed Chairman Jerome Powell said it was time to slow the pace of rate hikes.
Traders now see a 79% chance that the Fed will raise its key benchmark rate by 50 basis points in December and a 21% chance that it will raise rates by 75 basis points.
Salesforce Inc (CRM.N) fell 9.4% after the software maker announced that Bret Taylor would step down as co-chief executive officer in January.
Dollar General Corp (DG.N) fell 8.1% after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp (COST.O) lost 6.3% after the member-only chain reported slower sales growth in November.
During afternoon trading, the S&P 500 fell 0.09% to 4,076.38 points.
The Nasdaq gained 0.14% to 11,483.66, while the Dow Jones Industrial Average fell 0.59% to 34,384.99.
Of the 11 S&P 500 sector indices, nine fell, led lower by financials (.SPSY), down 0.91%, followed by a 0.75% loss in real estate (.SPLRCR).
A report from the Labor Department on Thursday showed that initial claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 225,000 for the week ending Nov. 26.
Investors are now waiting Friday for nonfarm payroll data for clues on how interest rate hikes have affected the labor market.
Falling stocks outperformed rising stocks within the S&P 500 (.AD.SPX) by a ratio of 1.1 to one.
The S&P 500 posted 30 new highs and no new lows; the Nasdaq recorded 90 new highs and 59 new lows.
Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru, and by Noel Randewich in Oakland, California; Edited by Shounak Dasgupta and David Gregorio
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