Stock Market News Today: Market overcome lower open to make marginal gains (SP500)

U.S. stocks on Wednesday overcame a lower open to make marginal gains, after fresh economic data bolstered bets that the Federal Reserve would be able to deliver a soft landing for the economy.

The focus continues to remain on whether Wall Street will be able to sustain its astonishing rally into the end of the year.

Approaching mid-day, the tech-heavy Nasdaq Composite (COMP.IND) had added 0.21% to 15,034.16 points. The benchmark S&P 500 (SP500) was slightly higher by 0.04% to 4,770.44 points, while the Dow (DJI) was under some pressure, fluctuating on either side of the flatline. The blue-chip index was last up 0.05% to 37,575.43 points.

Of the 11 S&P sectors, six were in the red, led by Consumer Staples. Communication Services topped the gainers.

The three major averages had wavered at the open as market participants took a beat after a seven-week bull run. That rally has sent equities near record levels, with the Dow (DJI) and the Nasdaq 100 (NDX) having already scaled all-time peaks. The S&P 500 (SP500) is likely next in line, with the gauge hovering about 26 points short of its best closing high on record.

Shortly after the start of regular trading, U.S. existing home sales data came in, with the figure accelerating to 3.820M in November compared to a consensus estimate of 3.77M. The rise marked the end of a five-month skid as easing mortgage rates have made buying of homes slightly more affordable. Notably, numbers from the Mortgage Bankers Association earlier in the day showed that the 30-year fixed mortgage rate reached its lowest level since June.

Sentiment was also boosted by the Conference Board’s gauge of consumer confidence in December, which rose to 110.7 and surged past estimates of 103.4.

“There are plenty of ingredients that go into the recipe for rising confidence, but three of the big ones are the unemployment rate, the price for a gallon of gasoline and the stock market. All three moved in the right direction of late,” Wells Fargo’s Tim Quinlan said.

“The recent push higher in equities is lifting spirits. The S&P 500 (SP500) is up nearly 4% since the start of December as strong conviction the Fed is not only done hiking rates but about to ease policy rather substantially in the new year has fueled the recent run. Households equity holdings have risen over time, and through the second quarter, about 23% of all assets were held in corporate equities and mutual funds,” Quinlan added.

Treasury yields were largely lower on Wednesday. Traders will be keeping an eye on an upcoming $13B 20-year bond auction later in the day. The longer-end 30-year yield (US30Y) was little changed at 4.03%, while the 10-year yield (US10Y) was down 2 basis points to 3.91%. The shorter-end more rate-sensitive 2-year yield (US2Y) was down 4 basis points to 4.40%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

“The ‘Everything Rally’ has taken the 10-year bond yield (US10Y) from 5.02% in late October to below 4% last week, taking the term premium back below zero. It’s a stunning reversal,” Fidelity’s Jurrien Timmer said on X (formerly Twitter).

“What’s next for bonds? My guess is that yields will meander between 4% and 5% in 2024, as ongoing questions about the emerging era of Fiscal Dominance weigh on the term premium. Next year’s election will likely be between two populists, and populists are not generally considered fiscal hawks. The forces that pushed the 10-year yield (US10Y) to 5% have not been repudiated by a soft landing,” Timmer added.

Turning to active movers, FedEx (FDX) slumped nearly 11% and was the top percentage loser on the S&P 500 (SP500), after the global economic bellwether reported a quarterly top and bottom line miss and provided disappointing revenue guidance.

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