Wall Street up, S&P 500 gains fourth straight day

Wall Street ended Thursday with a majority of the major indexes higher, with the S&P 500 gaining for a fourth straight day. Investors are wondering what could help push stocks higher.

The Dow Jones Industrial at the close was up 0.65 percent, to 42,322.75 points. The S&P 500 was up 0.41 percent, at 5,916.93 points. The Nasdaq Composite was down 0.18 percent, at 19,112.32 points. The Russell 2000 mid-cap index was up 0.52 percent, at 2,094.70 points. The VIX index was down 4.24 percent, at 17.83 points.

"Market sentiment has shifted toward cautious optimism as recession fears begin to subside and stock markets show fundamental strength. However, a range of macro and micro risks continue to create a 'wall of worry' for investors to navigate," said Joe Cusick, senior vice president and portfolio specialist at Calamos Investments. "The next phase will depend on whether the current rally can extend and sustain itself through the summer months or give way to a healthy consolidation or correction."

Among companies, shares of Meta Platforms fell 4% on Thursday after the Wall Street Journal reported that the company plans to delay the rollout of its main “Behemoth” language model.

UnitedHealth Group fell nearly 11% after the Wall Street Journal reported that the U.S. Department of Justice was investigating the health insurer for possible Medicare fraud. The company said it had not been informed of the investigation by federal prosecutors. UnitedHealth shares have fallen by more than half in the past month.

Shares of Cisco Systems rose nearly 5% after the networking equipment maker raised its annual forecast and named Mark Patterson its new chief financial officer. Apple shares fell less than 1%. Trump said he had asked Apple CEO Tim Cook to stop building plants in India and instead bring production back to the U.S.

Foot Locker rose more than 85% after rival Dick's Sporting Goods agreed to acquire Foot Locker in a deal valued at $2.4 billion.

Alibaba Group Holding's U.S.-listed shares fell more than 7 percent. The company reported quarterly revenue that was below forecasts.

In the current environment, the economy may experience more supply shocks, which poses a challenge to monetary policy decisions, US Federal Reserve Chairman Jerome Powell said on Thursday during the Thomas Laubach Research Conference in Washington.

"We may be entering a period of more frequent and potentially more persistent supply shocks. That's a tough challenge for the economy and central banks," the head of the U.S. central bank told a monetary policy conference. " Higher real interest rates may also reflect the possibility that inflation will be more volatile in the future than it was in the inter-crisis period of 2010-2020," he added.

Powell said Fed members are considering changes to key parts of the guidance they use to make monetary policy decisions, including how they think about U.S. job shortages and their approach to inflation targeting.

"Meeting participants agreed that it would be appropriate to reconsider communication on the issue of shortages. We had similar discussions on the inflation target at our meeting last week," Powell said Thursday in prepared remarks for a research conference on the Fed's monetary policy framework. "We will ensure that our new consensus statement is robust to a wide range of changes in economic conditions and events," he added.

Powell did not provide a specific date for the completion of the strategic review, only saying he expects it to happen in the coming months.

On Thursday, investors received a large portion of the latest data from the US economy.

The number of people applying for unemployment benefits for the first time in the U.S. last week was 229,000. Economists had expected initial jobless claims to be 228,000, up from 229,000 previously, revised down from 228,000.

The number of unemployed people continuing to collect benefits was 1.881 million in the week ending May 3. Analysts had expected 1.89 million, compared with the previous figure of 1.872 million, revised down from 1.879 million.

The Empire Manufacturing Index fell to -9.2 points in May from -8.1 points a month earlier, after a revision. Analysts had expected the index to be -8 points.

US retail sales rose 0.1% month-over-month in April. Analysts had expected sales of 0.0%. Retail sales excluding auto sales rose 0.1%, while analysts had expected a 0.3% increase.

A month earlier, US retail sales rose by 1.7% MoM, revised from +1.4%, and excluding auto sales, rose by 0.8%, revised from +0.5%.

The PPI industrial production prices in the US fell by 0.5% month-on-month in April and rose by 2.4% year-on-year. Excluding food and energy prices, the PPI fell by 0.4% month-on-month and rose by 3.1% year-on-year.

Analysts expected PPI to rise by 0.2% MoM, and excluding food and energy prices, they expected growth of 0.3% MoM, compared to 0.0% (revised from -0.4%) and +0.4% a month earlier (corrected from -0.1%).

In year-on-year terms, PPI growth of 2.5% and growth of 3.1% for the core indicator were expected, compared to +2.7% and +3.3%, respectively, in the previous month.

The Philadelphia Fed's manufacturing activity index rose to -4 points in May from -26.4 points a month earlier, after a correction. Analysts had expected an index of -11 points.

The National Association of Home Builders (NAHB) index of sentiment among American construction companies fell to 34 points in May from 40 points in the previous month. The market expected an index of 40 points.

On the oil market, WTI futures for May are down 2.19 percent to USD 61.77 per barrel, while June Brent futures are down 2.15 percent to USD 64.67 per barrel. (PAP Biznes)

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