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S&P 500 notches first record high in two years in tech-driven run
The stock market rallied to record highs on Friday, with Wall Street buoyed by investor expectations of interest rate cuts ahead by the Federal Reserve and robust corporate profits.
With technology stocks driving early year gains, the S&P 500 rose 1.2% to a record 4,839, sailing above the broad index’s prior closing high of 4,796 in January 2022. The Dow Jones Industrial Average surged nearly 400 points, or 1.1%, and the Nasdaq Composite climbed 1.7%.
“When the stock market last peaked, the Fed had yet to begin raising interest rates to combat inflation” Greg McBride, chief financial analyst for Bankrate, said in an email. “In the two years since, we saw the fastest pace of interest rate hikes in 40 years. With inflation now moving back toward the target of 2%, the focus is on when the Fed will begin trimming interest rates.”
Investors were cheered Friday by a report from the University of Michigan suggesting the mood among U.S. consumers is brightening, with sentiment jumping to its highest level since July 2021. Consumer spending account for roughly two-thirds of economic activity.
Perhaps more importantly for the Fed, expectations for upcoming inflation among households also seem to be anchored. A big worry has been that such expectations could take off and trigger a vicious cycle that keeps inflation high.
Economists at Goldman Sachs started the week by predicting the central bank is likely to start lowering its benchmark interest rate in March and make five cuts all told during the year.
The investment bank expects the U.S. economy to come in for a “soft landing,” with modestly slowing economic growth, and for inflation to keep dropping this year. Goldman expects the central bank to gradually ease rates, which would steadily reduce borrowing costs for consumers and businesses.
John Lynch, chief investment strategist for Comerica Wealth Management, thinks robust corporate earnings and expectations for declining interest rates are likely to drive markets higher in 2024.
—The Associated Press contributed to this report
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FEMA administrator: “I don’t know that anybody could be fully prepared for the amount of flooding” from Helene in North Carolina
FEMA Administrator Deanne Criswell said on Sunday that the “historic flooding” in North Carolina from the remnants of Hurricane Helene has gone beyond what anyone could have planned for in the area.
“I don’t know that anybody could be fully prepared for the amount of flooding and landslides that they are experiencing right now,” Criswell said on “Face the Nation with Margaret Brennan.”
Helene made landfall in Florida as a powerful Category 4 storm late Thursday, before sweeping through states in the southeast. Criswell called the storm “a true multi-state event,” adding that her team on the ground has seen “significant impacts in Florida, Georgia, South Carolina, North Carolina and Tennessee.”
Asheville, North Carolina, was particularly hard hit as rising floodwaters damaged roads, led to power outages and cut off cellphone service.
For North Carolina in particular, Criswell said the agency has had teams in the area for several days and is sending more search and rescue teams. She said water remains a “big concern,” and the Army Corps of Engineers is working to see what can be done to get water systems back online. And she noted that the agency is also working to bring in satellite communications.
“We’re hearing significant infrastructure damage to water systems, communication, roads, critical transportation routes, as well as several homes that have been just destroyed by this,” Criswell said. “So this is going to be a really complicated recovery in each of these five states that have had these impacts.”
The Federal Emergency Management Agency has received reports of multiple fatalities across five states, Criswell said. She encouraged people in the affected areas who are looking for someone to call 211 and register the information.
Criswell said in Florida, there was up to 15 feet of storm surge in Taylor County, where she traveled to at the direction of President Biden, adding that there are record storm surges across the Big Bend area. She said in North Carolina, “we’re still in active search and rescue mode,” with ongoing flooding issues and landslides. The administrator will travel to Georgia and North Carolina to assess the impact of the hurricane in the coming days.
In terms of resources for the affected states, Criswell said “we absolutely have enough resources from across the federal family” and can draw from other federal agencies to support the response and recovery.
“We will continue to bring those resources in to help them,” Criswell said. “We want to work with them to rebuild in a way that’s going to help make them more resilient and reduce the impacts from the increased number of storms that they’re experiencing.”
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The high stakes & low blows of vice presidential debates
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Nature: Sunflowers in South Dakota
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