By Bansari Mayur Kamdar and Johann M Cherian
(Reuters) – Wall Street’s main indexes surged on Thursday on hopes that the Federal Reserve’s policy tightening was ending and the world’s largest economy was heading for a soft landing, while Meta Platforms jumped on strong third-quarter revenue forecast.
Meta gained 8.2% after it also reported a jump in second-quarter advertising revenue, topping Wall Street financial targets.
The Facebook parent’s results followed strong performance by Alphabet earlier this week, which show that consumers, and advertisers eager to reach them, are spending despite broad economic concerns.
Outsized gains in megacap growth stocks have helped the Nasdaq lead the charge on Wall Street so far this year, but the Dow is catching up, as investors bet on sectors beyond technology.
The blue-chips Dow is now on track for its 14th straight day of gains, its longest winning streak since at least 1920, according to Refinitiv data.
On Wednesday, the U.S. Federal Reserve raised interest rates by 25 basis points as expected. Traders now expect only a 20% chance that the Fed could surprise with a quarter-point increase in September. [FEDWATCH]
Fed Chair Jerome Powell said on Wednesday that Fed staff are no longer forecasting a U.S. recession.
On Thursday, a Commerce Department report showed the economy grew faster than expected in the latest quarter.
“A better-than-expected second quarter GDP print is supportive of the soft landing scenario,” said Carol Schleif, chief investment officer at BMO Family Office.
“It’s clear that the Fed has yet to cause a recession even after its many rate hikes over the past year.”
At 9:44 a.m. ET, the Dow Jones Industrial Average was up 84.43 points, or 0.24%, at 35,604.55, the S&P 500 was up 38.60 points, or 0.85%, at 4,605.35, and the Nasdaq Composite was up 224.09 points, or 1.59%, at 14,351.37.
EBay forecast third-quarter profit below market expectations as the e-commerce platform spent more to bolster categories such as auto parts, refurbished goods and collectibles, sending its shares down 7%.
Chipmakers including Nvidia, Micron and Marvell Technology rose nearly 3% each after Lam Research forecast upbeat quarterly sales. Shares of Lam advanced 9.6%.
Shares of universal banks like Citigroup and Wells Fargo and Bank of America <BAC.N> were mixed ahead of a rule U.S. regulators are set to unveil later in the day that could significantly raise capital requirements for the lenders.
Southwest Airlines tumbled 7.7% after the airline posted a dip in second-quarter profit, while Royal Caribbean surged 7.6% after the cruise operator lifted its annual profit forecast.
Elsewhere, the European Central Bank raised interest rates for the ninth consecutive time and kept the door open to further tightening.
Advancing issues outnumbered decliners by a 1.89-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.
The S&P index recorded 35 new 52-week highs and one new low, while the Nasdaq recorded 65 new highs and 28 new lows.
(Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)
