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Friday, September 22, 2023

Wall Street Opens Higher as Oil Retreats on Iran News; Dow up 210 Pts

Wall Street Opens Higher as Oil Retreats on Iran News; Dow up 210 Pts
© Reuters

By Geoffrey Smith 

Investing.com — U.S. stock markets opened higher on Thursday, supported by hopes that the impacts of sanctions on Russia in response to its invasion of Ukraine will cause the Federal Reserve to be more cautious about withdrawing stimulus from the economy.

The market was helped by unverified reports from Iranian sources suggesting that the U.S. and its allies could sign a deal to lift sanctions on Iran within 72 hours. That turned the crude oil market around on a dime, leading U.S. crude futures to swing from a gain of over 3% to a decline of 1.3% by early in New York trading.

By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 209 points, or 0.6% at 34,101 points, extending the gains it made on Wednesday in response to Fed Chair Jerome Powell apparently ruling out a 50 basis point increase in the fed funds rate later this month. The S&P 500 was up 0.5% and the NASDAQ Composite was up 0.1%. All three had posted gains of over 1.5% on Wednesday. 

Powell continues with a second day of Congressional testimony in the Senate Thursday. Elsewhere, Cleveland Fed President Loretta Mester was quoted by newswires as saying that a series of 25 basis point hikes “puts us in a good place” to bring down inflation, adding that the situation in Ukraine had increased uncertainty over the economic outlook.

Earlier, the Labor Department had said initial jobless claims fell back toward the 200,000 level last week, reinforcing the belief that disruption to the labor market from the wave of Omicron-variant Covid-19 has largely run its course. At the same time, there was further – albeit older – evidence of inflationary pressures continuing to build in the economy. Unit labor cost growth was revised up to 0.9% in the fourth quarter from an initial estimate of 0.3% while nonfarm productivity growth was left at 6.6%.

Sentiment continues to be dominated by the war in Ukraine, which continued with heavy rocket artillery attacks on cities Thursday. Russia also reportedly completed the conquest of Kherson, a port city on the Black Sea that controls the Dnepr, Ukraine’s main waterway. Peace talks between Russian and Ukrainian delegations resumed but appeared unlikely to make material progress, with Russian President Vladimir Putin telling his French counterpart Emmanuel Macron that trying to win time with talks would serve no purpose, and that the invasion (or ‘special military operation’) would continue “to the end.”

Among early movers, Snowflake (NYSE:SNOW) stock fell 15% after the cloud data warehousing company released disappointing guidance after the bell on Wednesday, while fellow Cloud-company Splunk (NASDAQ:SPLK) rose 7.6% after posting more upbeat growth numbers. Retailers Best Buy (NYSE:BBY) and Kroger (NYSE:KR) both rose over 11% after their quarterly numbers pointed to successful ongoing recoveries from the pandemic.

Tesla (NASDAQ:TSLA) stock fell 1.0% after news that the company and its CEO Elon Musk will stand trial for alleged breach of fiduciary duty over Musk’s $2.5 billion pay award in 2018.  That outweighed German reports that Tesla’s factory outside Berlin is set to get its final key permits from regulators in the near future. 

Electric vehicle rival Rivian (NASDAQ:RIVN) stock meanwhile fell 4.8% to touch a new record low after the company rolled back a price increase it had announced earlier. 




Source: Investing.com

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