Bargain Hunting Lifts Wall Street Indexes

Barry Adams
30 Oct, 2023
New York City

Wall Street indexes advanced, and investors looked ahead to another batch of quarterly earnings and rate decisions from the Federal Reserve, the Bank of England, and the Bank of Japan.

Market indexes rebounded after volatile trading in the previous week on ongoing rate anxieties and worries about the rise of long-term interest rates and their negative impact on the U.S. economy.

Investors are hoping that the Federal Reserve will leave the fed funds rates unchanged at the end of its two-day meeting on November 1 and provide insights into the economy.

Investors are also looking forward to reviewing the Fed's estimate of economic growth in 2023, inflation outlook, and jobless rate estimate.

Interest rate uncertainties rose after the third quarter. GDP growth accelerated to 4.9%, powered by strong consumer spending growth, indicating resilient consumers despite multiple rate hikes over the last eighteen months.

Last week, the S&P 500 index fell to correction territory and the Nasdaq Composite sank deeper into correction, largely because of rate uncertainties.

On the earnings front, companies are reporting a sustained rise in sales, driven in part by price hikes passed on to consumers.

Amazon, Microsoft, Meta Platforms, and Intel advanced after earnings met or exceeded investors' expectations, but Google-parent Alphabet plunged after the company reported slower-than-expected growth in its cloud unit.

Investors are looking ahead to quarterly results from Apple on Thursday after the close of regular trading sessions, and the stock has declined 15% from its 52-week high.

 

U.S. indexes and Yields

The S&P 500 index increased 0.2% to 4,145.06, and the Nasdaq Composite advanced 0.8% to 12,714.50.

The yield on 2-year Treasury notes decreased to 5.06%, 10-year Treasury notes inched lower to 4.90%, and 30-year Treasury bonds edged down to 5.06%.

Crude oil decreased $1.15 to $84.14 a barrel, and natural gas prices fell 14 cents to $3.34 a thermal unit.

The dollar index edged higher to 106.28, the level last seen in November 2022, as the prospect of a widening war in the Middle East rose amid negative comments over the last five days from leaders in Lebanon, Egypt, Iran, Syria, the UAE, Saudi Arabia, and Qatar.

 

U.S. Stock Movers

McDonald's Corp. gained 2.2% to $261.24 after the fast-food company reported third-quarter earnings ahead of market expectations.

Revenue in the quarter increased 4% to $5.9 billion from $5.7 billion, net income soared 63% to $1.8 billion from $1.1 billion, and diluted earnings per share jumped to $2.45 from $1.68 a year ago.

The fast food chain reported strong business metrics in the quarter.

Global comparable sales in the quarter increased 12.6%, reflecting strong comparable sales of 12.6% in each market segment; systemwide sales increased 9%; and consolidated operating income rose 10% from a year ago.

U.S. comparable sales jumped to 12.6% from 3.5% in the period a year ago after the company passed on higher prices to customers.