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Wall Street ends higher while hopes for a less aggressive Fed grow By Stocksak

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© Stocksak. FILE PHOTO – A woman stands in front Snap Inc’s logo on the New York Stock Exchange floor in New York City (NY), U.S.A. March 2, 2017. REUTERS/Lucas Jackson

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By Chuck Mikolajczak

NEW YORK – Stocks surged Friday following a report that the U.S. Federal Reserve was likely to debate a smaller interest rates hike in December. This raised hopes that the central banking might adopt a less aggressive policy stance.

According to a Wall Street Journal report some Fed officials have begun to voice their desire to slow down the pace at which increases are occurring soon. They also plan to signal their intention to approve a smaller increase for December.

Mary Daly, President of San Francisco Federal Reserve, echoed the sentiment and said that it was time to talk about slowing down the rate of increases in borrowing costs. This should avoid sending the economy into a “forced downturn” by raising interest rates too quickly.

Charles Evans, President of Chicago Federal Reserve Bank, reiterated his belief that the Fed should raise policy to “a little above” 4.5% by the beginning of next year and then keep it there.

Analysts expect the Fed to raise rates by 75bps for its fourth consecutive meeting in November. Equities have been under severe pressure this year due to the Fed’s aggressive rate hike plan. It is trying to control stubbornly high inflation and increasing fears of a policy error that would send the economy into recession.

“You had the report and then you had confirmation that 75 seems to have been pretty baked in for November here, but perhaps there is some room to slow down and extend… rather front-load so high then have to peel it off, you kinda ease to your 4.75% to 5% peak,” said Tom Hainlin from U.S Bank Wealth Management in Minneapolis.

“Then, maybe you can just hold on for a while to get a little relief.”

The index rose 748.97 point, or 2.27 percent, to 31,082.56, and gained 86.97 point, or 2.377%, at 3,752.75; and the added 244.87points, or 2.31% to 10,859.72.

For the week, the S&P 500 climbed 4.74%, the Dow gained 4.89% and the Nasdaq rose 5.22%. Each of the major indexes saw their largest weekly percentage gains in just four months.

This report helped stock recover from early losses. Snap Inc (NYSE: ) plunged 28.08% after posting its lowest quarterly revenue growth in five-years as advertisers cut spending due inflation and geopolitical woes.

Other companies that heavily rely on ad revenue, such as Meta Platforms Inc, which fell 1.16% and Pint (NYSE:), which fell 6.40%, were also affected.

Also, quarterly earnings reports were also down American Express (NYSE:) which lost 1.67% Verizon Communications (NYSE:) Down 4.46%

American Express claimed it had built larger provisions to protect against possible defaults in the event of an economic downturn. Verizon’s profit dropped 23%, and the carrier missed estimates regarding wireless subscriber additions.

Next week will see earnings from Twitter and other names. Microsoft Corp (NASDAQ :), Alphabet NASDAQ : and Apple Inc NASDAQ :

Despite the recent batch of disappointing results, third-quarter earnings season has so far has been better-than-feared, with growth expectations for S&P 500 companies at 3.1%, according to Refinitiv data, up from 2.8% earlier in the week but still well below the 11.1% forecast at the start of July.

Schlumberger (NYSE:) shot up 10.33% to help to lift the S&P 500 energy sector 2.76% after reporting a quarterly profit above expectations.

Volume on U.S. Exchanges was 12.15 trillion shares, compared to 11.57 billion for the entire session in the last 20 trading day.

On the NYSE, declining issues were outnumbered by advancing ones by a ratio of 2.59 to 1. On Nasdaq however, a ratio of 2.03 to 1 favors advancers.

The S&P 500 posted 9 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 60 new highs and 322 new lows.

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Stocksak Editorial

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