Wall Street’s benchmark S&P 500 index on Friday ended higher in a choppy trading session, as gains in defensive shares overshadowed energy declines, and investors shrugged off hawkish comments from US Federal Reserve officials about interest rate hikes.
Federal Reserve Bank of Boston President Susan Collins said that, with little evidence price pressures are waning, the Fed might need to deliver another 75 basis-point rate hike as it seeks to get inflation under control.
On Thursday, St Louis Fed President James Bullard set off equity declines when he said that the Fed needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation.”
Photo: AFP
With Collins and then Bullard “we have had some very hawkish talk, but the market has really taken it in stride,” Trust Advisory Services cochief investment officer Keith Lerner said. “It hasn’t hit the market to the downside like it has in the past.”
The Dow Jones Industrial Average rose 199.37 points, or 0.59 percent, to 33,745.69, the S&P 500 gained 18.78 points, or 0.48 percent, to 3,965.34 and the NASDAQ Composite added 1.1 points, or 0.01 percent, to 11,146.06.
For the week, the S&P 500 fell 0.69 percent, retreating modestly after a month-long rally spurred by softer-than-expected inflation data that sparked hopes the central bank could temper its market-punishing rate hikes.
The NASDAQ fell 1.6 percent for the week, while the Dow was basically unchanged, dipping 0.01 percent.
“Markets are in a bit of a holding pattern” ahead of employment and other economic data, New York Life Investments economist and portfolio strategist Lauren Goodwin said.
“What is driving all equities of course is Fed policy and the gravitational force that rising interest rates have on the equity complex as a whole,” Goodwin said. “We are not likely to see any real evidence in terms of potentially declining wage pressure or inflation pressure for another couple of weeks.”
Defensive groups led the way among S&P 500 sectors, with utilities up 2 percent, real estate rising 1.3 percent and healthcare 1.2 percent higher.
The energy sector fell 0.9 percent, as oil prices dropped, stemming from concern about weakened demand in China and further increases to US interest rates.
Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on the NASDAQ, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted eight new 52-week highs and three new lows, while the NASDAQ Composite recorded 62 new highs and 141 new lows.
About 9.7 billion shares changed hands on US exchanges, compared with the 12 billion daily average over the past 20 sessions.
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