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Wall Street closed higher on Monday, driven by energy and discretionary stocks. Market participants remained hopeful about the Federal Reserve’s November meeting, backed by positive comments from various Fed officials. All of the three most widely followed indexes closed the session in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 61.29 points, or 0.2%, to close at 42,124.65. Seventeen components of the 30-stock index ended in positive territory, while 13 ended in negative.
The tech-heavy Nasdaq Composite rose 25.95 points, or 0.1%, to close at 17,974.27.
The S&P 500 advanced 16.02 points, or 0.3%, to close at 5,718.57. Eight of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Real Estate Select Sector SPDR (XLRE) jumped 1.2%, 1.2% and 1.1%, respectively, while the Health Care Select Sector SPDR (XLV) slid 0.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 1.6% to 15.89. Advancers outnumbered decliners by a 1.48-to-1 ratio on the NYSE. The S&P 500 recorded 62 new 52-week highs and one new low, while the Nasdaq Composite posted 80 new highs and 123 new lows.
Fed Officials Send Dovish Signals About November Meeting
On Monday, the Fed officials said their 50 bp rate cut last week was intended to help sustain an emerging and healthy balance in the economy. Inflation, according to them, is heading toward the Fed's target rate. They are also content with the level the unemployment rate is at, as they believe that it is consistent with stable prices.
On the day, three Fed presidents came out with comments supporting last week's rate cut. They look at these cuts as an acknowledgment that the erstwhile policy was putting too much pressure on the economy at a time when cost pressures are going down.
"I am comfortable with a starting move like this - the 50 basis point cut in the federal funds rate announced last Wednesday - as a demarcation that we are back to thinking more about both sides of the mandate," Chicago Fed President Austan Goolsbee said, "If we want a soft landing, we can't be behind the curve." Atlanta Fed President Raphael Bostic said the economy was closing in on its normal level for both key statistics faster than he expected, and that monetary policy should and has adjusted accordingly. "In this moment,” Bostic added, “I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago."
Minneapolis Fed president Neel Kashkari was a bit more conservative in his remarks. While he agreed the 50 bp cut was appropriate, he stated that he would also have supported a 25 bp reduction. However, he said he felt two more 25 bp cuts were needed by the end of the year because "the balance of risks has shifted away from higher inflation and toward the risk of a further weakening of the labor market."
These comments pulled the markets up from last session’s weariness. Discretionaries and real estate emerged as the biggest winning sectors.
Image: Shutterstock
Stock Market News for Sep 24, 2024
Wall Street closed higher on Monday, driven by energy and discretionary stocks. Market participants remained hopeful about the Federal Reserve’s November meeting, backed by positive comments from various Fed officials. All of the three most widely followed indexes closed the session in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 61.29 points, or 0.2%, to close at 42,124.65. Seventeen components of the 30-stock index ended in positive territory, while 13 ended in negative.
The tech-heavy Nasdaq Composite rose 25.95 points, or 0.1%, to close at 17,974.27.
The S&P 500 advanced 16.02 points, or 0.3%, to close at 5,718.57. Eight of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Real Estate Select Sector SPDR (XLRE) jumped 1.2%, 1.2% and 1.1%, respectively, while the Health Care Select Sector SPDR (XLV) slid 0.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 1.6% to 15.89. Advancers outnumbered decliners by a 1.48-to-1 ratio on the NYSE. The S&P 500 recorded 62 new 52-week highs and one new low, while the Nasdaq Composite posted 80 new highs and 123 new lows.
Fed Officials Send Dovish Signals About November Meeting
On Monday, the Fed officials said their 50 bp rate cut last week was intended to help sustain an emerging and healthy balance in the economy. Inflation, according to them, is heading toward the Fed's target rate. They are also content with the level the unemployment rate is at, as they believe that it is consistent with stable prices.
On the day, three Fed presidents came out with comments supporting last week's rate cut. They look at these cuts as an acknowledgment that the erstwhile policy was putting too much pressure on the economy at a time when cost pressures are going down.
"I am comfortable with a starting move like this - the 50 basis point cut in the federal funds rate announced last Wednesday - as a demarcation that we are back to thinking more about both sides of the mandate," Chicago Fed President Austan Goolsbee said, "If we want a soft landing, we can't be behind the curve." Atlanta Fed President Raphael Bostic said the economy was closing in on its normal level for both key statistics faster than he expected, and that monetary policy should and has adjusted accordingly. "In this moment,” Bostic added, “I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago."
Minneapolis Fed president Neel Kashkari was a bit more conservative in his remarks. While he agreed the 50 bp cut was appropriate, he stated that he would also have supported a 25 bp reduction. However, he said he felt two more 25 bp cuts were needed by the end of the year because "the balance of risks has shifted away from higher inflation and toward the risk of a further weakening of the labor market."
These comments pulled the markets up from last session’s weariness. Discretionaries and real estate emerged as the biggest winning sectors.
Consequently, shares of Darden Restaurants, Inc. (DRI - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) gained 1.5% and 2.3%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
No economic data was released on Monday.