Wall St climbs after investors digest slew of economic data

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(Reuters) -Wall Street’s key indexes gained on Thursday as investors assessed the latest batch of economic data and looked towards a key inflation metric and any signs of progress on a U.S. funding bill.

Megacap growth stocks including Meta Platforms (NASDAQ:META), Tesla (NASDAQ:TSLA), Alphabet (NASDAQ:GOOGL) and Nvidia (NASDAQ:NVDA) reversed their early course to gain between 1.6% and 2.6%, steering a more than 1% jump in the tech-heavy Nasdaq.

At 12:12 p.m. ET, the Dow Jones Industrial Average was up 157.12 points, or 0.47%, at 33,707.39, the S&P 500 was up 32.36 points, or 0.76%, at 4,306.87, and the Nasdaq Composite was up 142.30 points, or 1.09%, at 13,235.15.

Data showed the U.S. economy maintained a fairly solid pace of growth in the second quarter.

Separate readings showed initial jobless claims rose slightly last week – signaling tight labor market conditions – and a higher-than-expected fall in contracts to buy existing homes in August.

However, a looming U.S. government shutdown and an ongoing strike by auto workers are seen dimming the outlook for the rest of 2023.

With just few days away from a shutdown resolution, investors awaited the Democratic-controlled Senate’s procedural vote on a bipartisan short term spending measure.

“With federal government spending at almost 7% of U.S. GDP, a shutdown will slow down GDP growth,” said Philip Marey, senior U.S. strategist at Rabobank.

Also on radar will be comments by Federal Reserve Chair Jerome Powell at 4 p.m. ET, while Chicago Fed President Austan Goolsbee noted the likelihood of changes to the central bank’s 2% inflation target once the current bout of inflation is over.

Traders’ bets on the benchmark rate remaining unchanged in November and December stood around 79% and 62%, respectively, according to CME’s FedWatch tool. Meanwhile, a 25-basis-point rate cut is being priced in as early as March, growing to over 31% in June and July.

Deepening inflation concerns, U.S. oil futures jumped to a more than one-year high on earlier on Thursday.

The S&P 500 and the Nasdaq are on course for their worst monthly performance of the year as Treasury yields hit multi-year highs on uncertainty around interest rates.

All the three indexes are set for their first quarterly decline in 2023.

“The focus is rates. Monetary policy is going to remain restrictive, but this rate hiking is going to come to an end sooner than later,” said Dennis Dick, market structure analyst at Triple D Trading.

For the day, communication services and materials were the top index gainers, while utilities remained the major laggard.

Among individual movers, Micron Technology (NASDAQ:MU) dropped 2.8% after forecasting a bigger-than-expected first-quarter loss.

CarMax (NYSE:KMX) lost 10.0% after the used-car retailer posted a lower-than-expected quarterly profit.

Accenture (NYSE:ACN) slumped 5.3% after the IT services firm forecast full-year earnings and first-quarter revenue below Wall Street targets.

Nike (NYSE:NKE) edged up 0.1% ahead of the sportswear maker’s quarterly results after the closing bell.

Advancing issues outnumbered decliners by a 2.49-to-1 ratio on the NYSE and by a 1.83-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 32 new lows, while the Nasdaq recorded 22 new highs and 219 new lows.