NEW YORK: The Nasdaq and the S&P 500 rose on Thursday as investors shifted into high-growth stocks amid optimism about a US debt ceiling deal being reached soon, while shares of Walmart gained on its strong annual forecast.
The benchmark S&P 500 index reversed declines by early afternoon trading on reports that top US congressional Republican Kevin McCarthy said the House could vote on reaching a deal to raise or suspend the debt ceiling as soon as next week.
President Joe Biden and McCarthy reiterated their aim to strike a deal soon on Wednesday to raise the $31.4 trillion federal debt ceiling and agreed to talk as soon as Sunday.
Analysts also pointed to a steady stream of better-than-feared earnings, positive developments around the debt-debate and data pointing to the Federal Reserve’s aggressive rate-hiking cycle taking hold helping boost sentiment.
Growth stocks led gains, with Nvidia Corp, Apple Inc and Microsoft Corp rising between 1% and 4.4%.
“We’re simply seeing money kind of leaking back into the market a little bit at a time as people have more comfort with the situation,” said David Russell, vice president of market intelligence at TradeStation.
“They’re seeing that AI is giving people a reason to get excited now, there’s simply money that has been wanting to come back, especially to semiconductors and technology stocks and now they’re getting a green light to do that.” Netflix Inc surged 9.9% after saying its recently launched ad-supported tier reached nearly 5 million active users per month.
Chipmaker Micron Technology Inc’s shares gained 5.0% as it plans to invest up to 500 billion yen ($3.70 billion) in Japan for new chips over the next few years.
Shares of Walmart Inc added 0.4% after the retailer raised its annual sales and profit targets, benefiting from inflation-wary consumers trading down to cheaper groceries.
At 12:07 p.m. ET, the Dow Jones Industrial Average was down 99.62 points, or 0.30%, at 33,321.15, the S&P 500 was up 13.43 points, or 0.32%, at 4,172.20, and the Nasdaq Composite was up 121.62 points, or 0.97%, at 12,622.18.
Take-Two Interactive Software Inc jumped 12.8% as it beat estimates for quarterly adjusted sales.
Bath & Body Works Inc gained 9.6% after the beauty and skincare firm raised its annual profit forecast.
Meanwhile, data showed the number of Americans filing new claims for jobless benefits fell more than expected last week, suggesting the labor market remains tight.
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