US STOCKS-Wall Street rises as Fed signals rate hikes may slow

BY Reuters | ECONOMIC | 11/23/22 02:34 PM EST

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Growth stocks bounce as Treasury yields drop


Indexes: Dow up 0.29%, S&P 500 up 0.53%, Nasdaq up 0.93%


Futures: S&P up 0.5%, Dow 500 up 0.3%, Nasdaq up 0.8%

(Adds Fed minutes, updates prices throughout)

By Carolina Mandl and Sin?ad Carew

Nov 23 (Reuters) - Wall Street's main indexes edged higher on Wednesday after minutes from the Federal Reserve's November meeting showed interest rate hikes may slow soon.

A "substantial majority" of policymakers agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes, according to the minutes.

Since the Fed's last meeting on Nov. 1-2, investors have been more optimistic that price pressure has started to ease, signaling smaller rate hikes could curtail inflation.

"What equity markets needed to see for the recent strength to continue was what we got from the minutes," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

At 2:19 p.m. ET, the Dow Jones Industrial Average rose 100.48 points, or 0.29%, to 34,198.58; the S&P 500 gained 21.14 points, or 0.53%, to 4,024.72; and the Nasdaq Composite added 103.99 points, or 0.93%, at 11,278.39.

Trading volume was thin ahead of the Thanksgiving holiday on Thursday, with the U.S. stock market open for a half-session on Friday.

Earlier in the morning, a mixed bag of economic data led to a drop in yield on the benchmark 10-year Treasury note, helping drive stocks up.

The number of Americans filing new claims for unemployment benefits rose more than expected last week and U.S. business activity contracted for a fifth straight month in November. Consumer sentiment ticked higher and home sales rose above expectations.

Advancing issues outnumbered decliners on the NYSE by a 1.77-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers.

The S&P 500 posted 21 new 52-week highs and no new lows; the Nasdaq Composite recorded 81 new highs and 112 new lows. (Reporting by Carolina Mandl, Shreyashi Sanyal and Ankika Biswas; Editing by Shounak Dasgupta, Arun Koyyur, Anil D'Silva and Richard Chang)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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