By Noel Randewich and Ankika Biswas
(Reuters) – Wall Street’s main indexes rose on Thursday as hotter-than-expected economic data eased worries about a recession without changing expectations of a pause in rate hikes next week, while Arm Holdings soared in its stock market debut.
SoftBank’s Arm was valued at nearly $60 billion in a strong Nasdaq debut, with the chip designer’s shares last up nearly 16%.
Retail sales rose more than expected in August on higher gasoline prices, while initial claims for state unemployment benefits climbed to a seasonally adjusted 220,000 for the week ended Sept. 9 from 217,000 the week before.
Monthly producer prices for final demand rose 0.7% last month, against expectations of a 0.4% increase. On an annual basis, they increased 1.6% compared with estimates of a 1.2% rise.
“Today’s economic data confirms the path toward a soft landing, but without being so hot that the Fed thinks they might need to do a couple more rate hikes,” said Ross Mayfield, Investment Strategy Analyst at Baird. “All together, it’s pretty bullish.”
Chip designer Arm’s American Depositary Shares opened at $56.1 apiece compared with the initial public offering price of $51, in a sign of confidence for other companies planning to list their shares.
Chipmakers including Nvidia, Micron Technology and Broadcom added between 0.2% and 1.6%.
“The game is back on. Capital markets are open for business,” said Thomas Hayes, chairman at Great Hill Capital LLC. “You’re going to see so many IPOs in the next 12 weeks your head is going to spin.”
Traders see a 97% chance of the Federal Reserve holding rates in its Sept. 20 policy meeting and a near 67% likelihood of a pause in November, according to the CME FedWatch Tool.
Citigroup expects the Fed to hike interest rates by 25 basis points in November, compared with its previous forecast of a September hike.
The S&P 500 was up 0.80% at 4,503.03 points.
The Nasdaq gained 0.80% to 13,923.64 points, while the Dow Jones Industrial Average was up 0.95% at 34,902.56 points.
The small-cap Russell 2000 index jumped 1.3% and was poised for its best day since the end of August.
Of the 11 S&P 500 sector indexes, 11 rose, led by real estate, up 1.55%, followed by a 1.32% gain in Utilities.
HP fell 2.6% after Warren Buffett’s Berkshire Hathaway sold about 5.5 million shares of the company.
Visa slipped 2.7% after the payment processing giant said it was engaging with Class B shareholders on a proposal to convert their shares to Class C or Class A.
Advancing issues outnumbered falling ones within the S&P 500 by a 7.0-to-one ratio.
The S&P 500 posted 12 new highs and 5 new lows; the Nasdaq recorded 30 new highs and 143 new lows.
(Reporting by Ankika Biswas, Shristi Achar A and Medha Singh in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb Chakrabarty and Vinay Dwivedi)
