US STOCKS-Nasdaq rises with growth stocks, rate hike worries linger

Reuters

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      Consumer spending rebounds in August but inflation picks
up 
    

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      Major indexes set for third straight quarterly decline
    

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      Nike slumps on margin warning, drags athletic gear makers
    

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      Dow flat, S&P up 0.38%, Nasdaq up 0.80%
    

  
 (Updates prices at open, updates comments)
    By Ankika Biswas and Shreyashi Sanyal
       Sept 30 (Reuters) - The Nasdaq rose on Friday as growth
stocks ticked higher on lower Treasury yields, even though
resilient core inflation added to worries of big interest-rate
hikes denting a rise in consumer spending.  
    Rate-sensitive stocks including Tesla Inc  TSLA.O , Meta
Platforms  META.O , Alphabet Inc  GOOGL.O  and Microsoft Corp
 MSFT.O  edged higher between 0.1% and 1.7%, tracking a dip in
the benchmark 10-year Treasury yield  US10YT=RR  to a week's low
of 3.682%.
    Data showed the core personal consumption expenditures price
index jumped 0.6% after being unchanged in July. It climbed 4.9%
on a year-on-year basis in August after increasing 4.7% in July.
 urn:newsml:reuters.com:*:nL1N31115S
    "What we need to see is decreasing inflation on a sequential
basis and we're just not seeing that yet," said Art Hogan, chief
market strategist at B. Riley Wealth.
    "This is not going to change that hawkish scenario that has
been driving equities lower and why we're getting the kind of
reaction we're seeing now."
    Fed funds futures showed traders see a nearly 68% chance of
the U.S. central bank raising rates by 75 basis points at its
November meeting, up from 61% odds before the inflation data.
 urn:newsml:reuters.com:*:nL1N31115W
    The Federal Reserve's aggressive stance on interest rate
hikes have pushed all the three major indexes into bear market
and set them for their third straight quarterly decline.
   The Dow Jones Industrial Average  .DJI  was set for its worst
month since pandemic lows. The S&P 500  .SPX  has slumped 8.2%
so far in September, testing its lowest level since November
2020, while the Nasdaq  .IXIC  has lost over 9% during the
month.
    "It's also quarter end and the market will potentially be
impacted, whether it's rebalancing or other kind of activity
such as bonds versus stocks," said Doug Fincher, portfolio
manager at Ionic Capital Management.
    Among the 11 major S&P 500 sector indexes, consumer
discretionary  .SPLRCD  stocks were the hardest hit as Nike Inc
 NKE.N  slid 10.64%. 
    The company warned of tightening margins, fueling concerns
of an industry-wide drop in profit due to an inflation-induced
hit to consumer sentiment.  urn:newsml:reuters.com:*:nL4N3112WI  urn:newsml:reuters.com:*:nL4N3103WB 
    Shares of Under Armour  UAA.N  slipped 6.5%, while footwear
retailer Foot Locker Inc  FL.N  dropped 3.9%.
    Lower-than-expected quarterly revenue from Carnival Corp
 CCL.N  pushed its shares down 18.6%, highlighting that soaring
prices forced consumers to cut discretionary spending such as
cruise travel.  urn:newsml:reuters.com:*:nL4N31137I
    Fed Vice Chair Lael Brainard and San Francisco Federal
Reserve Bank President Mary Daly backed the tough measures to
bring down high inflation, with Brainard warning against
premature rate cuts.  urn:newsml:reuters.com:*:nW1N30E01I  urn:newsml:reuters.com:*:nS0N30D03H   
    At 10:45 a.m. ET the Dow Jones Industrial Average  .DJI  was
up 10.91 points, or 0.04%, at 29,236.52, the S&P 500  .SPX  was
up 13.86 points, or 0.38%, at 3,654.33 and the Nasdaq Composite
 .IXIC  was up 86.30 points, or 0.80%, at 10,823.80.    
    Advancing issues outnumbered decliners by a 2.60-to-1 ratio
on the NYSE and by a 2.86-to-1 ratio on the Nasdaq.
    The S&P index recorded no new 52-week high and 49 new lows,
while the Nasdaq recorded 10 new highs and 184 new lows.
 
 (Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru;
Additional reporting by Bansari Mayur Kamdar; Editing by Arun
Koyyur)
 ((Ankika.Biswas@thomsonreuters.com;))

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