*
Powell acknowledges risks of over-tightening

*
ISM shows U.S. manufacturing weakness persists

*
Pfizer dips as obesity drug trial dropped

*
Indexes up: Dow 0.82%, S&P 0.59%, Nasdaq 0.55%

(Updates with closing prices)
By Stephen Culp
NEW YORK, Dec 1 (Reuters) – U.S. stocks rallied and the
S&P registered its highest close of the year on Friday, starting
December on an upbeat note as remarks from Federal Reserve Chair
Jerome Powell bolstered the view that key policy rates have
peaked.
All three major U.S. stock indexes advanced, with
economically sensitive transports and smallcaps
enjoying the most robust gains.
“Those sectors – the cyclicals – they’re the most hated
parts of the market year-to-date, (and they) are the parts that
are leading,” said Scott Ladner, chief investment officer at
Horizon Investments in Charlotte, North Carolina. “On the first
day of December, when everybody’s looking for a Santa Claus
rally, it probably carries a little bit of extra weight.”
“If December starts out strong, it’s going to make folks
jump on board and chase this rally,” Ladner added.
All three indexes notched their fifth consecutive weekly
percentage gains. On Thursday, they wrapped up a banner month in
which the S&P 500 and the Nasdaq registered their biggest
one-month percentage gains since July 2022, and the Dow closed
at its highest level since January 2022.
In prepared remarks, Powell acknowledged the central bank’s
need to “move forward carefully” amid signs of economic
softening, as the risks of over- and under-tightening its
monetary policy are becoming more balanced.
“Earlier in the week, (Fed Governor Christopher) Waller, one
of the Fed’s biggest hawks, said as inflation decreases, we’re
going to drop rates,” Ladner said. “The market thought that
Powell would push against those remarks, and he didn’t.
“(Powell) is setting the market up for rate cuts next
year.”

Data released on Friday showed U.S. manufacturing continues
to contract as factories contend with decreasing new orders,
falling inventories and labor pressures.
The Dow Jones Industrial Average rose 294.61 points,
or 0.82%, to 36,245.5, the S&P 500 gained 26.83 points,
or 0.59%, at 4,594.63 and the Nasdaq Composite added
78.81 points, or 0.55%, at 14,305.03.
Among the 11 major sectors of the S&P 500, real estate
was the biggest percentage gainer, while communication
services was the sole decliner.

Pfizer
slid
5.1
% as the drugmaker dropped plans to advance a twice-daily
version of oral weight-loss drug danuglipron into late-stage
studies, delaying its entry into the lucrative market.

U.S.-listed shares of
Alibaba
slipped
1.2
% following Morgan Stanley’s downgrade of the e-commerce
giant’s stock.

Marvell Technology
shed
5.3
% after the chipmaker’s fourth-quarter revenue forecast fell
short of Street estimates.

Ulta Beauty
surged
10.8
after the cosmetics retailer raised the lower end of its
annual net sales forecast and named Paula Oyibo its new chief
financial officer.

Paramount Global
jumped
9.8
% following a report the media company and Apple
have discussed bundling their streaming services at a discount.

Advancing issues outnumbered decliners on the NYSE by a
5.93-to-1 ratio; on Nasdaq, a 3.32-to-1 ratio favored advancers.

The S&P 500 posted 59 new 52-week highs and one new low;
the Nasdaq Composite recorded 106 new highs and 82 new lows.

Volume on U.S. exchanges was 12.34 billion shares,
compared with the 10.58 billion average for the full session
over the last 20 trading days.

(Reporting by Stephen Culp; Additional reporting by Shristi
Achar A and Amruta Khandekar in Bengaluru; Editing by Richard
Chang)
(([email protected]; 646-223-6076))

Keywords: USA STOCKS/ (UPDATE 7, GRAPHIC)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: AAPL Feed: US STOCKS-S&P 500 hits 2023 closing high as Powell strengthens peak rate bets