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Thursday February 2nd, 2023 2:29AM

Wall Street opens broadly higher and is set for weekly gains

By The Associated Press
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NEW YORK (AP) — Stocks are opening broadly higher on Wall Street, keeping the S&P 500 on track to break a three-week losing streak. The benchmark index was up three-quarters of a percent in the early going on Friday, while big gains for technology companies pushed the Nasdaq composite up 1%. The Dow Jones Industrial Average was up about half a percent. All 11 industry sectors of the S&P 500 rose, including energy stocks, which caught a break from recent declines thanks to an upturn in oil prices. DocuSign rose sharply after the electronic signature company reported strong second-quarter sales and raised its subscription forecast.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — Wall Street is pointing higher before the opening bell a day after comments from the U.S. Federal Reserve chairman indicated that interest rate increases will likely be within expectations.

Futures for the Dow Jones Industrial Average and the S&P 500 climbed 0.7%, putting them on track to break free after three consecutive weeks of losses.

Fed Chair Jerome Powell on Thursday reaffirmed the central bank’s commitment to keep rates high as long as necessary to get inflation under control. Some market observers remain skeptical.

“Given the tremendous challenges ahead on the energy front, the war front, and with broad-based inflation already impacting people’s lives, it might be wiser to maintain rates at slightly stimulatory levels to help offset the general economic pain rather than adding to it,” said Clifford Bennett, chief economist at ACY Securities.

Stocks have lost ground in recent weeks after the Federal Reserve indicated it will continue raising interest rates to bring down the highest inflation in decades. The interest rate policies of the Fed and other central banks have a powerful influence on stock and bond markets.

Also Thursday, the European Central Bank made its largest-ever rate increase to fight inflation. The move is in line with steps taken by the U.S. Federal Reserve and other central banks.

In Europe at midday, France’s CAC 40 gained 1.5%, while Germany’s DAX picked up 1.3% and Britain’s FTSE 100 rose 1.5%.

Japan’s benchmark Nikkei 225 rose 0.5% to finish at 28,214.75. Australia’s S&P/ASX 200 added 0.7% to 6,894.20. Hong Kong’s Hang Seng jumped 2.8% to 19,389.03, while the Shanghai Composite added 0.8% to 3,262.05. Trading was closed in South Korea for a holiday.

“Ongoing recovery in the risk environment could provide a positive backdrop for the Asia session to end the week, although Chinese equities still seem to be finding some difficulty in tapping on the improved environment for some relief,” said Yeap Jun Rong, market strategist at IG in Singapore.

China has been releasing a slew of economic data, with more expected next week. Interest is high because of how China’s “zero-COVID” policy has impacted economic activity in the world’s second-largest economy.

On the same day the European Central Bank delivered its big rate increase, Powell told a conference on monetary policy hosted by the Cato Institute, a think tank that promotes libertarian ideas, that the Fed would keep rates high “until the job is done” in getting inflation back down to its 2% goal.

“There is a record of failed attempts to get inflation under control, which only raises the ultimate costs to society,” Powell said.

The Fed has already raised rates four times this year and markets expect it to deliver another jumbo-sized increase of three-quarters of a percentage point at its next meeting in two weeks.

Powell “sounded very resolute in the (Fed’s) mission to squelch inflation, and as a result probably gave more credence to the possibility of a 75-basis point hike at the September meeting,” said Sam Stovall, chief investment strategist at CFRA.

“But once investors realized that he wasn’t really saying anything different than what he had said before, the markets swung back,” he said.

Shares in DocuSign jumped about 16% in premarket trading after the electronic signature company reported strong second-quarter sales and raised it subscription forecast.

In energy trading, benchmark U.S. crude rose $1.62 to $85.16 a barrel. Brent crude, the international standard, added $1.76 to $90.91 a barrel.

In currency trading, the U.S. dollar fell to 142.37 yen from 144.09 yen. The euro cost $1.0056, up from $1.0002.

___

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