U.S. stocks close higher amid optimism on debt ceiling progress

  • World
  • Friday, 02 Jun 2023

NEW YORK, June 1 (Xinhua) -- U.S. stocks ended higher on Thursday as investors applauded the debt ceiling progress in the U.S. Congress.

The Dow Jones Industrial Average rose 153.30 points, or 0.47 percent, to 33,061.57. The S&P 500 added 41.19 points, or 0.99 percent, to 4,221.02. The Nasdaq Composite Index increased by 165.70 points, or 1.28 percent, to 13,100.98.

Nine of the 11 primary S&P 500 sectors ended in green, with technology and industrials leading the gainers by rising 1.33 percent and 1.26 percent, respectively. Meanwhile, utilities and consumer staples lost 0.78 percent and 0.09 percent, respectively.

U.S. stocks advanced Thursday after the House of Representatives passed a debt ceiling bill Wednesday night in a decisive step to keep the federal government on track to avert a potential default, with the legislation now moving to the Senate.

Bipartisan lawmakers in the House approved the bill entitled Fiscal Responsibility Act by a vote of 314-117.

"The Senate will stay in session until we send a bill avoiding default to President Biden's desk," said Senate Majority Leader Chuck Schumer.

"Any change to this bill that forces us to send it back to the House would be unacceptable," Schumer added.

Comments from some central bankers suggesting there might be no need to hike interest rates again at the Federal Reserve's June 13-14 policy meeting have also boosted market sentiment.

Philadelphia Federal Reserve President Patrick Harker said on Thursday that he thinks the Fed is near the point of being able to stop raising interest rates. This comment came one day after Harker said it might be appropriate to "skip" a rate hike in June.

The monetary policy is in much better shape now with interest rate "at a more appropriate level than it was a year ago," wrote St. Louis Federal Reserve President James Bullard, in an analysis published on Thursday.

Investors are also digesting a flurry of new economic data, which provided further insight into the U.S. labor market. The labor market has been a closely watched sector given concerns that a tight situation could compel the Fed to raise rates again.

Private companies in the United States added 278,000 jobs in May, surpassing economists' expectations of 170,000, payroll data company Automatic Data Processing (ADP) reported Thursday.

The U.S. Department of Labor reported Thursday that new jobless claims rose to 232,000 in the week ending May 27, compared with the previous week's revised level of 230,000.

The Federal Reserve will meet on June 14 and members appear divided as to what action the Fed will take, said Kenny Fisher, senior market analyst at OANDA, a supplier of online multi-asset trading services.

"U.S. economic data has been solid, making it more difficult for the Fed to take a pause," said Fisher.

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