By Stephen Culp
NEW YORK (RockedBuzz via Reuters) – U.S. stocks moved higher and the dollar hit a seven-week high on Thursday as discount giant Walmart Inc lifted its sales outlook and strong economic data calmed recession fears, dampening also hopes that the Federal Reserve would cut interest rates before YEAR-END.
Investors continued to closely monitor the debt ceiling negotiations in Washington for signs that Democrats and Republicans may be moving closer to a deal.
Of the three major US stock indexes, tech stocks propelled the Nasdaq to the biggest gain, while the healthcare sector limited the blue-chip Dow’s progress.
Walmart reported better-than-expected quarterly results and raised its full-year sales forecast, citing consumer spending resilience and countering this week’s downbeat forecasts from Home Depot Inc and Target Corp.
“Walmart put a nice icing on the cake at the end of a solid earnings season for corporate America,” said Ryan Detrick, chief market strategist at Carson Group in Omaha.
Optimism over the debt ceiling talks varied, with hopes of a deal that avoids a catastrophic default.
“Traders are tiptoeing about whether Washington can get a deal sooner or later,” Detrick added. “We’ve seen this show before, and Washington doesn’t want to default right before a big election.”
“But for some reason, we like our drama in the United States.”
Data showed that Americans filed fewer initial jobless claims than expected last week, supporting the likelihood of a “soft landing” but also lowering the odds that the Federal Reserve will cut interest rates before the end of the year.
The Dow Jones Industrial Average rose 115.14 points, or 0.34%, to 33,535.91; the S&P 500 gained 39.28 points, or 0.94%, to 4,198.05; and the Nasdaq Composite added 188.27 points, or 1.51%, to 12,688.84.
European equities closed higher and the German DAX rose to its highest level since January 2022 on optimism over US debt ceiling talks.
The pan-European STOXX 600 index rose 0.39% and the MSCI indicator of worldwide stocks gained 0.64%.
Emerging market equities rose 0.25%. The broader MSCI index of Asia-Pacific stocks outside Japan finished up 0.32%, while Japan’s Nikkei was up 1.60%.
The greenback extended its climb against a basket of world currencies to reach a seven-week high, fueled by economic data and debt ceiling hopes.
The dollar index rose 0.63%, with the euro shedding 0.62% to $1.0772.
The Japanese yen weakened 0.73% against the greenback to 138.71 to the dollar, while the pound last traded at $1.2408, down 0.62% on the day.
The 10-year Treasury yield continued to rise, hitting its highest level since March on the back of economic data and hopes of a debt-limit resolution.
The 10-year benchmark note last fell 19/32 in price for a yield of 3.6534%, compared with 3.581% on Wednesday.
The 30-year bond fell 18/32 in price to hit 3.9105%, versus 3.878% on Wednesday.
Crude oil prices fell as US economic data pushed the dollar to a two-month high on growing expectations that the Federal Reserve could raise interest rates again in June.
U.S. crude fell 1.33% to $71.86 a barrel, while Brent fell $1.10, or 1.43%, to $75.97.
Gold moved against the dollar, with the precious metal losing some luster as economic data reduced the likelihood of a Fed rate cut before the end of the year.
Spot gold fell 1.2% to $1,957.09 an ounce.
(Reporting by Stephen Culp; Additional reporting by Elizabeth Howcroft and Kevin Buckland in London; Editing by Richard Chang and Leslie Adler)