Stock market today: Wall Street gains ground after encouraging updates from GM and other companies
By DAMIAN J. TROISE and ALEX VEIGA
AP Business Writers
Stocks are rising on Wall Street in afternoon trading Wednesday following some encouraging updates from U.S. companies, including General Motors.
The S&P 500 rose 0.2%. The Dow Jones Industrial Average rose 125 points, or 0.4%, to 35,543 as of 2:03 p.m. Eastern. The Nasdaq composite edged up less than 0.1%.
General Motors surged 10.2%. The company announced a big stock buyback, raised its dividend and told investors it won’t have any trouble absorbing the costs of its new labor contract. The stock is still down 5.4% for the year, while the S&P 500 is up more than 18%.
GM and its rivals agreed to new contracts with the United Auto Workers and Canadian auto workers in late October following strikes that lasted more than a month.
Ford rose 2.9% and Jeep maker Stellantis rose 5.3%.
Technology companies were behind much of the gains following several strong financial updates. NetApp jumped 15.5% after easily beating analysts’ forecasts for earnings in its latest quarter and raising its outlook for the year. TurboTax maker Intuit rose 2.6% and software maker Workday gained 12.2% following encouraging results and forecasts.
Treasury yields fell, taking more pressure off of stocks. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 4.27% from 4.33%. The yield on the 2-year Treasury fell sharply to 4.66% from 4.75%.
Stocks rose in Europe and were mixed in Asia.
On the losing end, Spam maker Hormel foods fell 5.3% after giving investors a weak profit forecast.
Wall Street also received an encouraging economic update. The U.S. economy grew at a brisk 5.2% annual pace from July through September, the government reported Wednesday, an upgrade from its previous estimate of 4.9%.
The revision helps give more credence to the argument that a recession was always unlikely in 2023, said Jamie Cox, managing partner for Harris Financial Group. Fears about a recession have been waning throughout the year amid strong economic reports and consumer spending.
“Below the surface though, you’re starting to see some cracks in the data,” he said. “Consumer spending having a negative impact on GDP is an unusual circumstance.”
Consumer spending, the lifeblood of the economy, rose at a 3.6% annual rate from July through September. That’s still healthy, but a downgrade from the previous estimate of 4%.
The report follows an encouraging survey on consumer confidence released Tuesday.
The broader economy has remained resilient partly because of strong consumer spending, despite lingering pressure from inflation. Wall Street will be closely watching retailers as they move through the important holiday shopping season. A record 200.4 million consumers shopped online and in stores over the holiday weekend, according to the National Retail Federation.
Sneaker and athletic apparel retailer Foot Locker rose 16.3% after reporting strong third-quarter earnings and giving investors an encouraging update on its financial forecast. Several other big retailers also gained ground. Nike rose 1.9% and Lululemon Athletica rose 2.4%.
Investors will get another key economic update on Thursday when the government releases its October data on the Federal Reserve’s preferred measure of inflation. Economists expect that measure to continue easing, as it has been since the middle of 2022. The Federal Reserve will meet again in December to update its interest rate policy.
Wall Street expects the Fed to keep its benchmark interest rate steady and is betting that it is finished hiking rates, which remain at their highest levels in two decades. The central bank has said it will base future rate decisions on the latest economic data, though recent statements from officials have boosted hopes that the most aggressive round of rate hikes is at an end.
Christopher Waller, a member of the Fed’s Board of Governors, signaled Tuesday that the central bank is likely finished raising rates and could cut rates as early as spring. Wall Street is betting that the Fed will start cutting rates by the middle of 2024.
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AP Economics Writer Paul Wiseman contributed to this report.
