NEW YORK (AP) — Stocks are holding near their record levels Tuesday following updates that showed the economy grew sharply during the third quarter, but inflation remains high and consumers are losing confidence.
The S&P 500 rose 0.1% and is just below the all-time high it set earlier this month. The Dow Jones Industrial Average rose 66 points, or 0.1%, as of 10:38 a.m. Eastern. The Nasdaq composite rose 0.1%.
A majority of stocks with the S&P 500 were losing ground, but the market was being bolstered by several big technology stocks. Nvidia rose 0.8% and Google’s parent company, Alphabet, rose 1%. They are among several companies with outsized valuations that tend to have more impact on the broader market’s direction.
Novo Nordisk jumped 8.9% after U.S. regulators approved a pill version of the blockbuster weight-loss drug Wegovy, the first daily oral medication to treat obesity.
Wall Street is getting the latest economic updates during an otherwise quiet holiday-shortened week. Markets in the U.S. will close early Wednesday for Christmas Eve and remain closed for Christmas on Thursday.
The U.S. economy grew at a 4.3% annual rate during the third quarter. That builds on 3.8% growth during the second quarter and marks a sharp turnaround from the first quarter, when the U.S. economy shrank for the first time in three years.
The latest report also showed that stubborn inflation continues to hover over the economy. The Federal Reserve’s favored inflation gauge — called the personal consumption expenditures index, or PCE — climbed to a 2.8% annual pace last quarter, up from 2.1% in the second quarter.
The yield on the 10-year Treasury rose to 4.18% from 4.15% just before the report on gross domestic product for the third quarter was released. The yield on the two-year Treasury, which more closely tracks expectations for Fed actions, rose to 3.54% from 3.49% just prior to the report’s release.
The Fed has been taking a more cautious policy approach amid mixed signals from the economy. Economic growth has been occurring at the same time that inflation remains stubbornly above the central bank's 2% target. The job market is also slowing, adding another layer of concern to whether the central bank should continue cutting interest rates.
Wall Street expects the Fed to hold rates steady at its upcoming meeting in January.
Consumer spending and confidence has been a shaky amid worries about high prices, especially with a wide-ranging U.S. trade war that could drive prices for many goods even higher.
The latest update from business group The Conference Board showed that consumer confidence fell in December to its lowest level since tariffs were rolled out in April. Meanwhile, retail sales have been weakening, with consumers growing more cautious.
Consumers have become more targeted in their buying during the holiday shopping season, according to Visa's Consulting and Analytics division. From Nov. 1 through Sunday, cash and credit card sales rose 4.2%, which is less than the 4.8% increase during the same period a year ago.
Markets were mixed in Asia and Europe.
___
Matt Ott and Elaine Kurtenbach contributed to this report.
...