Wall Street pulls near its all-time high

Trader John Romolo works on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

U.S. stocks rose near their record levels on Wednesday as mixed data on the economy kept alive hopes that a cut to interest rates is coming soon.

The S&P 500 gained 0.3 per cent and pulled within 0.6 per cent of its all-time high set in late October. The Dow Jones Industrial Average climbed 408 points, or 0.9 per cent, and the Nasdaq composite added 0.2 per cent.

The biggest jump in the S&P 500 came from Microchip Technology, which leaped 12.2 per cent after saying it expects sales and profit for the final months of the year to come in at the high end of the forecasted ranges it earlier gave. CEO Steve Sanghi said business is doing better than expected, and it’s reducing inventory levels.

Marvell Technology was another winner and rose 7.9 per cent after the supplier of semiconductor products delivered a stronger profit for the latest quarter than analysts expected. CEO Matt Murphy credited demand for its data center products, while also announcing a purchase of Celestial AI to bolster its artificial-intelligence infrastructure business. The deal’s price tag could top US$3.25 billion.

Stocks broadly got a lift from easing Treasury yields in the bond market. Yields fell after a report suggested U.S. employers outside of the government may have cut more jobs in November than they added.

While the surprisingly weak report from ADP may be discouraging for people looking for jobs, it also bolstered expectations that the Federal Reserve will cut its main interest rate next week. If the Fed does, that would be the third cut of the year in hopes of helping the slowing job market.

Investors love lower interest rates because they boost prices for investments and can charge up the economy.

A separate report Wednesday on activity for U.S. services business was more encouraging. It said growth was stronger last month than expected for businesses in the retail, finance, insurance and other industries.

The report from the Institute for Supply Management’s survey also said that prices were increasing at their slowest rate since April. That’s important because the main argument against cutting interest rates is that it could worsen inflation.

The yield on the 10-year Treasury fell to 4.06 per cent from 4.09 per cent late Tuesday.

Lower interest rates can boost prices for all kinds of investments, and bitcoin climbed above US$93,000 following its scary downward run in recent weeks. It briefly plunged below US$81,000 last month.

On Wall Street, American Eagle Outfitters rallied 15.1 per cent after the retailer reported a better profit than expected. Its CEO, Jay Schottenstein, said it also saw a strong start to the holiday shopping season with an acceleration in demand across its brands during the Thanksgiving weekend.

Capricor Therapeutics surged 371.1 per cent after the biotech company reported encouraging results for its potential therapy for people with Duchenne muscular dystrophy.

On the losing end of Wall Street were relatively few companies, including one out of every three stocks in the S&P 500 index. But among them were some of the market’s most influential stocks, which kept indexes in check.

Microsoft fell 2.5 per cent and was the heaviest weight on the S&P 500.

Macy’s lost 1.1 per cent after flipping between losses and gains through the day. It reported a profit for the latest quarter that was much better than the loss that analysts were expecting, but its stock had already come into the day with a gain for the year so far that more than doubled the S&P 500’s.

All told, the S&P 500 rose 20.35 points to 6,849.72. The Dow Jones Industrial Average added 408.44 to 47,882.90, and the Nasdaq composite gained 40.42 to 23,454.09.

In stock markets abroad, indexes were close to flat in Europe following a mixed finish in Asia.

Japan’s Nikkei 225 jumped 1.1 per cent on gains for technology stocks like Tokyo Electron. SoftBank Group Corp. leaped 6.4 per cent following reports that its founder, Masayoshi Son, regretted having to sell shares in computer chipmaker Nvidia to help pay for other investments.

Chinese indexes sank following the release of data showing weaker factory activity. Stocks fell 1.3 per cent in Hong Kong and 0.5 per cent in Shanghai.

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Stan Choe, The Associated Press. AP Business Writers Matt Ott and Elaine Kurtenbach contributed.