U.S. Stocks Extend Gains After Treasury Yields Eased and Retail Sales Advanced

Barry Adams
14 Dec, 2023
New York City

U.S. stock indexes advanced a day after the Federal Reserve held interest rates steady.

The S&P 500 index and the Nasdaq Composite advanced as investors looked to build on the rally in the previous session after retail sales were ahead of expectations and the 10-year Treasury yield dropped to below 4%, the level last seen in August.

 

Retail and Food Services Sales Advanced in November

U.S. retail and food services sales in November adjusted for season variation but not for price, which rose 0.3% from the previous month, the Commerce Department reported in a release Thursday.

Retail and food services sales in the month increased 4.1% from the previous year, indicating resilient consumer spending at the start of the holiday season.

Retail trade sales were up 0.1% from October and up 3.1% above last year, and sales at nonstore retailers, including online sales, were up 10.6% from last year, while food services and drinking places were up 11.3% from a year ago.

 

U.S. Indexes and Yields

The S&P 500 index gained 0.5% to 4,787.25, and the Nasdaq Composite increased 0.6% to 14,723.14.

The yield on 2-year Treasury notes decreased to 4.33%, 10-year Treasury notes inched lower to 3.94%, and 30-year Treasury bonds eased to 4.11%.

Crude oil increased $1.05 to $70.55 a barrel, and natural gas prices rose 1 cent to $2.34 a thermal unit.

Gold increased $8.80 to $2,036.44 an ounce and extended gains for the second day in a row after the dollar declined following the Fed's rate decision and announcement to cut rates several times over the next two years. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 102.34.

 

U.S. Stock Movers

Solar stocks advanced after the Fed's signaled multiple rate cuts over the next two years. Merck and Moderna released a positive update for their experimental skin cancer vaccine. Adobe reported solid quarterly results but offered a muted 2024 outlook.

Adobe declined 3.5% to $602.0 after the company issued a lighter-than-expected revenue and earnings outlook for 2024.

Revenue in the fiscal fourth quarter ending in November rose 12% to $5.04 billion from $4.5 billion, net income advanced to $1.48 billion from $1.17 billion, and diluted earnings per share rose to $3.23 from $2.53 a year ago.

The company guided fiscal year 2024 revenue between $21.3 billion and $21.5 billion,  earnings per share between $13.45 and $13.85, and non-GAAP earnings per share between $17.60 and $18.0.

Adobe estimated fiscal first quarter revenue between $5.10 billion and $5.15 billion, GAAP earnings per share between $3.35 and $3.40, and non-GAAP earnings per share between $4.35 and $4.40.

Vir Biotechnology advanced 0.9% to $10.15 after the company announced various steps to reduce its operating expenses by at least $40 million annually.

The company said it will close its research and development facilities in St. Louis, Missouri, and Portland, Oregon, and eliminate 12%, or 75 jobs, by the first quarter.

Vir expects to incur between $30 million and $40 million in charges and recognize them through the third quarter of 2024.

Solar stocks advanced for the second day in a row after the Federal Reserve signaled multiple rate cuts in 2024 and 2025.

Enphase Energy jumped 3% on top of a 7% increase in the previous session to $110.78, and SolarEdge Technologies gained 2.3% to $84.50.

Merck edged lower by 0.3% to $106.81, and Moderna soared by 11.7% to $87.82 after the two companies released a midstage report showing experimental cancer vaccines helped to lower the risk of death or relapse in patients with skin cancer after three years.