Stock market today: Dow surges 500 points as Fed-fueled stocks set sights on records

US stocks soared on Thursday amid growing optimism that the Federal Reserve’s jumbo interest-rate cut will deliver a “soft landing” for the US economy.

The S&P 500 (^GSPC) climbed roughly 1.7%, while the Dow Jones Industrial Average (^IXIC) rose more than 500 points, with both trading around closing record highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 2.2%.

Stocks are rallying as investors take a closer look at the Fed’s decision to kick-start its new rate cycle with 50 basis point cut. After Wednesday’s policy announcement, the gauges swayed around before closing lower.

Wall Street has absorbed Chair Jerome Powell’s message that a deep cut in a relatively strong economy will ultimately fend off the risk of recession — and is a sign of faith, not panic about current conditions.

Bank of America now believes the Fed will go on to cut rates by 0.75% by the end of the year, versus the 0.50% it previously forecast. By comparison, the central bank’s own “dot plot” indicates policymakers expect a half-percentage-point reduction.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

Rate-sensitive growth stocks climbed in premarket trading, with Big Tech megacaps that fueled this year’s rally making gains. Alphabet (GOOG), Microsoft (MSFT) and Meta (META) were all up roughly 2%, while Apple (AAPL) added over 3%. Tesla (TSLA) and Nvidia (NVDA) rose around 4%.

With the Fed pivot done, some in the market have returned to watching data releases as they brace for potential volatility. A weekly Labor Department report on initial jobless claims on Thursday morning showed a fall to the lowest level in four months. The figure for the week ended Sept. 19 came in at 219,000, while the prior week’s total was revised 1,000 higher to 231,000.

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Thu, September 19, 2024 at 4:00 PM GMT+2

Existing home sales fall in August amid lower mortgage rates

Sales of existing homes fell in August as house hunters remained on the sidelines despite mortgage rates hitting their lowest level in over a year.

Existing home sales dropped 2.5% from July to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors said Thursday. Economists polled by Bloomberg expected existing home sales to hit a pace of 3.9 million in August.

On a yearly basis, sales of previously owned homes retreated 4.2% in August. The median home price increased 3.1% from last August to $416,700, the 14th consecutive month of annual price increases.

The combination of scarce inventory, escalating prices and elevated mortgage rates continue to weigh on sales activity — for now.

“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” NAR Chief Economist Lawrence Yun said in a press release.

However, economists at Fannie Mae don’t expect sales activity to turn around this year despite lower mortgage rates.

We “expect 2024 existing home sales to fall to the slowest annual pace since 1995.” they said.
Thu, September 19, 2024 at 3:54 PM GMT+2

Growth-chasing Campbell’s is in for a fight against private labels and big-name rivals

Yahoo Finance‘s Brooke DiPalma reports:

With products from stuffing-flavored chips to ghost pepper chicken noodle soup, companies are ramping up the competition in the grocery isles.

While retailers like Walmart (WMT) and Target (TGT) are plowing ahead with private labels, Campbell’s (CPB) is doubling down on innovation, marketing, and increased distribution to sell its famous brands like Goldfish.

“It all comes down to … creating the right value, which [is] not dependent solely on a price point,” CEO Mark Clouse told Yahoo Finance at Campbell’s investors day last week. “It is about, how do we add value in ways that are more differentiated and sustainable?”

Read more here.
Thu, September 19, 2024 at 3:31 PM GMT+2

Dow, S&P 500 jump to intraday record highs as stocks soar on jumbo rate cut

The Dow (^DJI) and the S&P 500 (^GSPC) touched record highs on Thursday as investors digested the the Federal Reserve’s announcement during the prior session — a 50 basis point rate cut.

The S&P 500 climbed roughly 1.7%, while the Dow rose more than 1%, both reaching record highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up more than 2.3%.

The major averages seesawed during the prior session following the Fed’s decision to cut rates.

Gold (CG=F) hovered near all-time highs. The precious metal and other commodities climbed as the dollar declinined