NEW YORK (AP) 鈥� Several strong profit reports helped Wall Street claw back most of its sharp loss from the prior day. The S&P 500 rose 1% Thursday and is back within 1% of its all-time high a day after its worst drop in nearly three months. The Dow Jones Industrial Average gained 0.9%, and the Nasdaq composite climbed 1.3%. Micron Technology leaped to one of the market鈥檚 biggest gains after reporting stronger results than expected. Treasury yields were mixed following a suite of economic reports, including one showing the U.S. economy grew by less during the summer than earlier estimated.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Wall Street on Thursday is clawing back some of its sharp loss from the prior day, which was its first major step backward since a rally began in late October.
The S&P 500 was 0.6% higher in afternoon trading, sitting less than 2% below its record set nearly two years ago. The Dow Jones Industrial Average was up 160 points, or 0.4%, a day after falling for the first time following five straight record-setting days. The Nasdaq composite was 0.8% higher, as of 2:01 p.m. Eastern time, and like the other indexes was up more earlier in the day.
Micron Technology climbed 7.2% for one of the market's biggest gains after reporting stronger results for the latest quarter than analysts expected and saying it sees business conditions improving throughout its fiscal year.
CarMax rose 4.2% after it beat profit expectations despite what it called 鈥減ersistent widespread pressures in the used car industry.鈥� And cruise operator Carnival steamed 6.3% higher after reporting better quarterly results than expected.
In the bond market, Treasury yields were mixed following a suite of reports on the economy. Mostly falling yields have been one of the main reasons the stock market has charged so high the last two months. They relax the pressure on the financial system, encourage borrowing and boost prices for investments.
The yield on the 10-year Treasury edged up to 3.89% from 3.86% late Wednesday after dipping earlier in the morning. In October, it had been above 5% and weighing heavily on markets.
Yields have been dropping on hopes that inflation has cooled enough for the Federal Reserve to not only halt its hikes to interest rates but to begin cutting them sharply next year. The Fed has hiked its main rate to the highest level in more than two decades, but officials released projections last week showing they see some cuts to rates coming in 2024.
Reports on Thursday painted a mixed picture of whether the Fed can indeed pull off the long-odds tightrope walk that Wall Street is hoping for: a slowdown in the economy powerful enough to conquer high inflation but not so strong that it causes a recession.
One report showed that slightly more U.S. workers last week, but the number was still below expectations and low relative to history. The hope at the Fed and on Wall Street is that the job market can cool by just the right amount so that it doesn't cause mass layoffs but also doesn鈥檛 add upward pressure on inflation.
Another report showed manufacturing in the mid-Atlantic region is weakening by much more than expected. Manufacturing has been one of the hardest-hit areas of the economy. And a third report said the U.S. economy鈥檚 growth during the summer wasn鈥檛 quite as powerful as earlier estimated.
They 鈥渨eren鈥檛 earth-shattering numbers, but they were still in line with the narrative that a cooling economy will keep the Fed on track to cut rates in the not-too-distant future,鈥� according to Chris Larkin, managing director, trading and investing at E-Trade from Morgan Stanley.
鈥淩ight or wrong, that sentiment has played a big role in the market鈥檚 recent surge, even though the Fed has been doing its best to temper expectations.鈥�
Wall Street has been ebullient about hopes that both a slew of rate cuts and a resilient economy in 2024 will be good for stock prices. The S&P 500 has charged roughly 15% higher in roughly two months on anticipation such supports are on the way, and the index is on track for an eighth straight week of gains.
That's despite Fed officials having penciled in far fewer rate cuts than Wall Street for 2024. Critics say the number of rate cuts traders are expecting is unlikely unless the economy falls into a recession, which some on Wall Street still see as an inevitable consequence of the rate hikes already instituted by the Federal Reserve.
That's raised criticism that stocks have simply gone too far, too fast and become too expensive relative to profits that companies are earning. Even before Wednesday's 1.5% drop for the S&P 500, several strategists on Wall Street were forecasting at least a pause in the rally in the short term.
In stock markets abroad, indexes were mostly lower in Europe and Asia. China was an exception, with stocks ticking 0.6% higher in Shanghai to trim its loss for the year by a bit. It鈥檚 one of the few markets globally that has not climbed sharply in 2023 amid hopes for easing inflation.
Stan Choe, The Associated Press
