By David French
(Reuters) – Wall Street benchmarks advanced on Thursday, with the Dow and the Dow hovering around record highs, as chip stocks rose on TSMC's upbeat forecast and stronger-than-expected monthly retail sales indicated a consumer Solid American.
Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, beat market estimates for profit and forecast a rise in fourth-quarter revenue, driven by demand for artificial intelligence chips.
The chipmaker's U.S.-listed shares soared 11.6%, while Nvidia (NASDAQ ), a favorite of ai trading and TSMC customer, gained 2.6%, hitting an all-time high.
The optimism spread to other chip stocks, sending the overall market up 2.2%.
New US data confirmed healthy growth in the world's largest economy, while keeping bets on a 25 basis point rate cut at the next Federal Reserve meeting largely intact at 89.4% , according to CME's FedWatch.
US retail sales rose 0.4% in September, slightly more than expected, while weekly jobless claims fell unexpectedly.
At 2:05 pm ET, the price was up 140.27 points, or 0.33%, at 43,217.97, on track for the fourth closing high in five sessions.
The S&P 500 rose 10.56 points, or 0.18%, to 5,853.03 points, within striking distance of its best all-time performance.
They advanced 72.23 points, or 0.39%, to 18,439.31.
A broadly optimistic start to the third-quarter earnings season, strong economic data and the start of its policy easing cycle by the Federal Reserve have pushed the Dow and S&P 500 to new all-time highs, with the benchmark close to the psychologically important mark of 6,000.
US stock benchmarks have advanced in recent days even as US Treasury yields have risen. On Thursday, the benchmark 10-year bond yield rose 7.5 basis points to 4.091%.
Interest in US stocks will remain strong, projected Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group (OTC 🙂
“The fact that yields are higher in the United States and the U.S. economy is doing well, much better than the rest of the world, that foreign supply for U.S. stocks is still coming in, and I suspect it's not completely exhausted.”
Some of the money that had chased potential economic stimulus measures in China is likely to return to U.S. assets, Wizman noted.
While major benchmark indices advanced for the second consecutive day, small cap indices fell. It and the S&P Small Cap 600 () fell 0.3%, and both closed Wednesday at their highest level in almost three years.
Most S&P 500 sectors were also in negative territory, including rate-sensitive indices like utilities and real estate. which fell 0.6% and 0.4%, respectively.
In earnings-related moves, insurer Travelers Companies (NYSE gained 8.1% after its third-quarter earnings beat market expectations. Money manager Blackstone Group (NYSE rose 7% to an all-time high after its latest figures also exceeded expectations.
However, health insurer Elevance Health plunged 12.1% after slashing its full-year profit forecast.
Shares of streaming giant Netflix (NASDAQ ), which is scheduled to report its third-quarter results after the bell, fell 1.2%.
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