Wall Street’s main indexes eked out gains on Friday ahead of Federal Reserve Chair Jerome Powell’s comments at a monetary policy panel amid optimism that a deal to avoid a catastrophic U.S. debt default could be reached over the weekend.
The positive momentum carried through for much of the week as investors tracked progress in talks between top U.S. lawmakers for an agreement on increasing the $31.4 trillion debt ceiling.
President Joe Biden and Republican U.S. House Speaker Kevin McCarthy have voiced growing confidence about striking a deal soon, although they could be tripped up by last-minute opposition from the hardline House Freedom Caucus.
“The (investor) optimism is surrounding the comments being made by politicians regarding resolution of the debt ceiling issue,” said Jason Pride, chief of investment strategy and research at Glenmede.
The main indexes traded in a tight range ahead of the panel discussion hosted by the Fed staff research conference at 11 a.m. EDT.
“He (Powell) should be articulating a need for the Fed to remain committed to bringing inflation down and to its path of interest rate hikes… he is going to articulate data dependency on that,” Pride said.
At 9:54 a.m. ET, the Dow Jones Industrial Average was up 81.69 points, or 0.24%, at 33,617.60, the S&P 500 was up 13.76 points, or 0.33%, at 4,211.81, and the Nasdaq Composite was up 7.56 points, or 0.06%, at 12,696.39.
Deere & Co rose 4.4% after the heavy machinery company raised its annual net income forecast buoyed by robust farm incomes.
Morgan Stanley fell 0.5% after CEO James Gorman announced he would step down from the role in the next 12 months.
Shares of Foot Locker Inc plunged 25.2% after the footwear retailer cut its annual sales and profit forecasts.
Its forecast weighed on Dow Jones Industrial Average component Nike Inc, shares which fell 4.4%., while Under Armour Inc also lost 3.3%.
Regional banks showed signs of steadying after few volatile weeks, with the KBW Regional Banking index up 8.6% for the week, and on track to mark its best performance since early January last year.
The benchmark S&P 500 index and the Nasdaq were set for their best weekly performance since late March amid positive debt ceiling talks, less-than-feared earnings and economic data.
The S&P 500 banks index is on course to end the week 5.4% higher, snapping a three-week losing streak.
Alphabet Inc added 0.7% on a report that Samsung Electronics won’t be swapping its default search engine from Google to Microsoft’s Bing any time soon.
Over 90% of S&P 500 companies have reported, of which around 77% beat earnings expectations, according to Refinitiv data.
Advancing issues outnumbered decliners by a 2.02-to-1 ratio on the NYSE and by a 1.74-to-1 ratio on the Nasdaq.
The S&P index recorded 27 new 52-week highs and one new low, while the Nasdaq recorded 58 new highs and 28 new lows.
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