NEW YORK (AP) – United States (US) stocks rose to another record on Thursday as financial markets around the world rallied again.
The S&P 500 added 0.4 per cent to set an all-time high for the third time this week and the 42nd time this year. The Dow Jones Industrial Average gained 260 points, or 0.6 per cent, to finish just shy of its record, while the Nasdaq composite rose 0.6 per cent.
Micron Technology led the way with a jump of 14.7 per cent after the maker of computer memory and storage products delivered stronger profit for the latest quarter than analysts expected.
It benefited from sales related to artificial-intelligence (AI) technology, where a boom has helped drive some stocks to astounding heights.
Jabil climbed 11.7 per cent after the electronics manufacturer likewise reported stronger profit and revenue than expected. It also announced a plan to plow cash to its shareholders by buying back up to USD1 billion of its stock.
But drops for Exxon Mobil and other oil-and-gas companies kept the market’s gains in check. Oil prices sank after The Financial Times reported through sources that Saudi Arabia is preparing to abandon its unofficial price target of USD100 a barrel for crude.
The price of a barrel of benchmark US crude fell 2.9 per cent to settle at USD67.67, while the international standard of Brent crude fell 2.5 per cent to USD71.60. That dragged Exxon Mobil’s stock down 1.7 per cent, and it was one of the heaviest weights on the S&P 500. ConocoPhillips sank 3.2 per cent.
The biggest drop in the S&P 500 hit Super Micro Computer, which gave back some of its huge gains after more than tripling last year amid the AI frenzy.
Its stock tumbled 12.2 per cent following a report from The Wall Street Journal saying the US Department of Justice is probing the seller of servers and storage systems. The company declined to comment.
A prominent investor, Hindenburg Research, published a report in August that accused the company of accounting red flags and other issues, which CEO Charles Liang later said contained false or inaccurate statements.
All told, the S&P 500 rose 23.11 points to 5,745.37. The Dow rose 260.36 to 42,175.11, and the Nasdaq composite gained 108.09 to 18,190.29.
In stock markets overseas, indexes were more buoyant on hopes for more moves by China to prop up the world’s second-largest economy. The country’s powerful Politburo on Thursday called for intensified efforts as China tries to meet its goals for economic growth, according to the official Xinhua News Agency.
That follows a raft of announcements earlier in the week by the country’s central bank that had also sent global markets jumping. China’s economic growth has been flagging, and officials appear to be making a more coordinated effort following earlier piecemeal attempts to boost it.
In the US, meanwhile, more encouraging news came after a round of reports on Thursday suggested the world’s largest economy may be doing better than expected.
Fewer US workers applied for unemployment benefits last week in the latest signal that layoffs remain relatively low across the economy.
A separate report said the overall US economy grew at a three per cent annual rate during the spring, as previously estimated. That’s a solid rate.
The hope on Wall Street is for a form of financial nirvana where the US economy’s growth can hold steady and keep profits for companies humming while the Federal Reserve (Fed) continues to lower interest rates.
The Fed last week made a drastic turn in how it sets interest rates. It’s now cutting them to make things easier for the US economy after keeping rates high for years in hopes of extinguishing high inflation. Lower rates not only make it less expensive to borrow money to buy a house, a car or things on credit cards, they can also boost prices for all kinds of investments.
The fear is that the job market could weaken further as the cumulative effects of all the Fed’s past hikes to interest rates show themselves. The Fed had earlier kept its main interest rate at a two-decade high for more than a year, and US employers have already begun to slow their hiring.
Many traders on Wall Street are betting the Fed will end up cutting interest rates more deeply this year than officials have indicated. But if economic reports remain strong and keep topping expectations, the Fed may not end up cutting as much as investors are betting. That could make the US stock market, which critics said already looks too expensive, look even pricier.
In the bond market, the yield on the 10-year Treasury remained at 3.79 per cent, where it was late Wednesday. The two-year yield, which more closely follows expectations for what the Fed will do with short-term interest rates, rose to 3.62 per cent from 3.56 per cent.
In stock markets abroad, jumps of 4.2 per cent in Hong Kong and 3.6 per cent in Shanghai led the way. Indexes also climbed 2.8 per cent in Japan, 2.3 per cent in France and 1.7 per cent in Germany.
South Korean stocks jumped 2.9 per cent, led by semiconductor maker SK Hynix, which launched production of a new memory chip for AI.
