Salesforce down on slow revenue growth
C3.ai plunges on dour revenue outlook
Goldman Sachs falls, co plans more job cuts
Indexes up: Dow 0.62%, S&P 0.88%, Nasdaq 1.07%
By Shreyashi Sanyal and Shristi Achar A
June 1 (Reuters) – U.S. stock indexes rose by midday trading on Thursday as investors cheered passage of a bill by lawmakers to suspend the nation’s debt ceiling amid bets that the Federal Reserve will skip raising interest rates in its next meeting.
Investors also looked on economic indicators, including the ADP National Employment Report that showed more-than-expected jobs additions in May, while a separate reading said weekly jobless claims increased modestly, both suggesting the labor market’s resilience.
The bill to suspend the $31.4 trillion debt ceiling headed to the Senate, which must enact the measure before a Monday deadline, when the government is expected to run out of money to pay its bills.
Democratic Majority Leader Chuck Schumer said the Senate will stay in session until members approve the bill.
With signs of progress in the debt ceiling saga, focus will now shift to the Labor Department’s closely watched jobs report for May, due on Friday, that will help determine whether the Federal Reserve will stick with its aggressive interest rate-hiking cycle.
The odds favoring a pause in rate hikes at the Fed’s June 13-14 policy meeting were around 71% after the day’s datasets.
Comments by Fed officials on Wednesday, including governor and vice chair nominee Philip Jefferson, leaning toward a momentary pause in hikes had helped drive down bets for a hike.
«We’re at the potential beginning of a soft landing,» said David Russell, vice president of Market Intelligence at TradeStation.
«When you look at the debt ceiling apparently being resolved, we could be in a situation where we wake up from the nightmare of inflation and the risk of a default to the soft landing.»
At 12:14 p.m. ET, the Dow Jones Industrial Average was up 203.11 points, or 0.62%, at 33,111.38, the S&P 500 was up 36.84 points, or 0.88%, at 4,216.67, and the Nasdaq Composite was up 138.93 points, or Maglia Manchester City 1.07%, at 13,074.21.
Separately, data showed U.S. manufacturing contracted for a seventh straight month in May.
Limiting gains on the Dow, Salesforce Inc fell 4.6% after the company posted its slowest pace of revenue growth in 13 years.
Goldman Sachs Group Inc lost 1.7% after the lender revealed plans of more workforce reductions as the difficult economic environment weighs on dealmaking.
Meta Platforms Inc added 2.3%, helping boost the Nasdaq after unveiling its next-generation mixed reality headset.
However, Macy’s Inc shed 1.3% and Dollar General Corp slid 19.5% as the retail companies cut their full-year sales forecasts as high inflation dimmed American consumer outlook.
C3.ai Inc slumped 13.0% after the artificial intelligence company forecast annual revenue outlook below street estimates.
Advancing issues outnumbered decliners by a 3.33-to-1 ratio on the NYSE and by a 2.24-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 18 new lows, while the Nasdaq recorded 38 new highs and 85 new lows.
(Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)
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