© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 11, 2023. REUTERS/Brendan McDermid
By Saeed Azhar and Shreyashi Sanyal
NEW YORK (Reuters) – The and the Nasdaq rose modestly on Monday, helped by gains in Alphabet (NASDAQ:) and Meta Platforms, although some investors refrained from big bets ahead of a fresh round of talks about raising the U.S. debt ceiling.
U.S. President Joe Biden and top congressional Republican Kevin McCarthy were set to meet on Monday to discuss raising the federal debt ceiling, just 10 days before the United States could face an unprecedented default.
“The market is in a holding pattern,” said Nadia Lovell, senior U.S. equity strategist at UBS Global Wealth Management in New York.
“We have to see how this debt ceiling stuff goes and the resumption of negotiation around that. Also people are waiting to hear more from the Fed.”
Comments by St. Louis Fed President James Bullard on Monday that the Federal Reserve may still need to raise its benchmark interest rate by another half-point this year pushed up the U.S. dollar.
Investors will look for clues on the monetary policy path from a slew of Fed speakers and key data points this week such as the April personal consumption expenditure (PCE) index and durable goods.
The PCE index reading, the Fed’s preferred inflation gauge, is due on Friday.
Technology-related stocks lifted the market, with Alphabet Inc rising 2.2% and Meta Platforms Inc (NASDAQ:) up 1.7%.
“As debt ceiling drama intensifies mega-cap tech stocks have become Wall Street’s new favorite defensive trade,” said Edward Moya, senior market analyst at OANDA.
Apple Inc (NASDAQ:) fell 0.5% after Loop Capital downgraded the iPhone maker’s stock to “hold” from “buy,” its first rating cut in five months according to Refinitiv data.
In a move perceived as ramping up U.S.-China trade tensions, Beijing barred chipmaker Micron Technology Inc (NASDAQ:) from selling memory chips to key domestic industries, sending its shares down 3.3%.
Regional banking stocks were lifted by news that PacWest Bancorp has agreed to sell a portfolio of 74 real estate construction loans to a subsidiary of Kennedy-Wilson (NYSE:) Holdings Inc.
Pacwest shares surged 21.5%, Lender Western Alliance (NYSE:) rose 7% and Comerica (NYSE:) Inc climbed 3.3%.
Shares of larger lenders were subdued, with JPMorgan Chase & Co (NYSE:) down 0.7%, despite the company saying its net interest income will rise $3 billion as interest payments increase from its purchase of failed First Republic Bank (OTC:) this year.
The fell 106.01 points, or 0.32%, to 33,320.62; the S&P 500 gained 5.51 points, or 0.13%, to 4,197.49; and the added 64.21 points, or 0.51%, at 12,722.11.
Dow component Chevron Corp (N:) dipped 0.7% after the oil major said it would acquire PDC Energy (NASDAQ:) Inc in an all-stock transaction for $7.6 billion, including debt.
Advancing issues outnumbered decliners on the NYSE by a 1.90-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favored advancers.
The S&P 500 posted 18 new 52-week highs and nine new lows; the Nasdaq Composite recorded 76 new highs and 69 new lows.