NEW YORK — U.S. stocks are drifting around their records Thursday following the latest signals that the U.S. economy continues to hum.
The S&P 500 was 0.2% higher in early trading and flirting with its record level set early this week. The Dow Jones Industrial Average was adding 85 points, or 0.2%, to its own all-time high set the day before, and the Nasdaq composite was 0.3% higher, as of 9:37 a.m. Eastern time.
Nvidia and other companies in the chip industry were leading the way after global heavyweight Taiwan Semiconductor Manufacturing Co. reported bigger profit for the latest quarter than analysts expected. The company credited strong demand related to smartphones and artificial intelligence. TSMC’s stock that trades in the United States jumped 8.2%.
The 2% rise for Nvidia was the strongest force pushing upward on the S&P 500, and it was a sharp turnaround from earlier in the week when a warning from a major Dutch supplier to the chip industry, ASML, sent stocks sinking across the industry.
Treasury yields were also rising in the bond market following the latest encouraging reports on the U.S. economy. U.S. retailers made more in sales in September than in August, and underlying growth trends within the data were better than economists expected. The strength was “all the more impressive in the face of stretched household finances, particularly among lower-income shoppers, and pre-election jitters,” according to Gary Schlossberg, market strategist at Wells Fargo Investment Institute.
A separate report, meanwhile, said fewer U.S. workers applied for unemployment benefits last week, a signal that layoffs nationwide are relatively low and aren’t damaging the job market.
Such data bolster the hope that has sent U.S. stocks to records: The economy may make a perfect escape from the worst inflation in generations, one that doesn’t end with a recession that many investors thought looked nearly inevitable. And with the Federal Reserve now cutting interest rates to help the economy keep humming, the expectation among optimists is that stocks can rise even further.
Lower interest rates ease the brakes off the economy, boost prices for investments and make borrowing bills less costly for households and businesses. And rates are heading lower around the world, with only a couple exceptions.
The European Central Bank on Thursday cut its main interest rate by a quarter of a percentage point. That helped send stock indexes higher by 1.7% in France and 1.1% in Germany. They halted a run of losses that started the day in Asian stock markets, where Japan’s Nikkei 225 fell 0.7% and Hong Kong’s Hang Seng dropped 1%.
On Wall Street, insurer Travelers was another winner and rose 6.2% after reporting stronger profit and revenue for the latest quarter than analysts expected. Higher income made from its investments and elsewhere helped cover greater losses due to Hurricane Helene and severe wind and hail storms in multiple states.
It helped offset a 15.9% drop for Elevance Health, which reported weaker profit for the latest quarter than expected. The The Blue Cross-Blue Shield insurer also cut its forecast for profit for the full year, saying it was dealing with a “timing mismatch” between Medicaid rates and higher claims from customers.
CSX fell 4.9% after falling short of analysts’ profit expectations for the latest quarter. The railroad also expects only modest volume growth the rest of the year as the Southeast rebuilds after two major hurricanes.
In the bond market, the yield on the 10-year Treasury rose to 4.07% from 4.02%. The two-year yield, which moves more closely with expectations for action by the Fed, rose to from 3.94%.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
