S&P 500, Dow touch over one-week highs after business activity data

November 22, 2024 – 7:22 AM PST

REUTERS/Brendan McDermid/File Photo

(Reuters) – The S&P 500 and the Dow touched over one-week highs on Friday after data showed a still robust economy, while small-cap stocks outperformed large-cap indexes.

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The S&P flash PMI showed manufacturing activity stood at 48.8 in November, in line with estimates from a Reuters poll of economists. Services activity was at 57, beating expectations. A reading above 50 indicates expansion.

At 09:53 a.m. ET, the Dow Jones Industrial Average .DJI rose 264.30 points, or 0.60%, to 44,134.65, the S&P 500 .SPX gained 12.58 points, or 0.21%, to 5,961.29 and the Nasdaq Composite .IXIC lost 13.49 points, or 0.07%, to 18,958.93.

Keeping a lid on gains on the tech-heavy Nasdaq, Alphabet GOOGL.O dipped 0.9%, following on from Thursday’s 4% drop, as the Department of Justice argued to a judge the company was monopolizing online search.

The S&P 500 communication services sector .SPLRCL lost 0.5%, although a majority of the 11 sectors were in the green ledby consumer staples’ .SPLRCS 0.9% gain.

The small-cap Russell 2000 .RUT index gained 0.9% to touch a more than one-week high and was set for weekly advances of about 3%.

“With an economy that’s going to broaden out and see earnings growth coming from more of the economic sectors than just IT and communication services, it makes sense to again rotate into those smaller cap and midcap companies and so that puts a little bit of pressure on the larger caps,” said Thomas Martin, senior portfolio manager, Globalt Investments.

The benchmark S&P 500 .SPX and blue-chip Dow .DJI closed Thursday at one-week highs, with AI bellwether Nvidia NVDA.O managing modest gains after its quarterly forecast, while investors took comfort from robust economic data. On the day, Nvidia fell 1.9%.

The three main indexes are on track for weekly gains, with sentiment still strong about the positive implications Donald Trump’s tax and tariff policies could have for corporates after his win in the presidential election.

Expectations on the Federal Reserve’s policy move in December have recently swayed between a pause and a cut, as investors weigh the impact Trump’s policies can have on price pressures.

There is a 59.6% probability the central bank will lower borrowing costs by 25 basis points, as per the CME Group’s FedWatch Tool. Most brokerages also back a quarter-point cut.

Markets were also monitoring a missile exchange between Ukraine and Russia after the latter lowered its threshold for a nuclear retaliation earlier in the week.

Among top movers, Gap Inc GAP.N jumped 8.7% after the Old Navy parent raised its annual sales forecast and said the holiday season was off to a “strong start”.

Intuit INTU.O lost 3.9% after the TurboTax parent projected second-quarter revenue and profit below Wall Street estimates on Thursday.

Honeywell International HON.O advanced 1.7% after the industrial giant said it will sell its personal protective equipment business for about $1.33 billion.

Advancing issues outnumbered decliners by a 3.18-to-1 ratio on the NYSE and by a 2.16-to-1 ratio on the Nasdaq.

The S&P 500 posted 53 new 52-week highs and no new lows while the Nasdaq Composite recorded 82 new highs and 34 new lows.

^{Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Krishna Chandra Eluri}

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