US STOCKS-Wall Street ends higher, notches weekly gains as Fed meeting looms

By Stephen Culp

NEW YORK, Jan 27 (Reuters) – Wall Street gained ground
on Friday, marking the end of an rocky week in which economic
data and corporate earnings guidance hinted at softening demand
but also economic resiliency ahead of next week’s Federal
Reserve monetary policy meeting.

The S&P and the Nasdaq ended green, while the Dow closed
essentially unchanged.

From last Friday’s close, the S&P and the Dow posted
their third weekly gains in four, while the tech-laden Nasdaq
notched its fourth straight weekly advance.

“It’s a nice end to another solid week of what’s shaping
up to be a historically strong month,” said Ryan Detrick, chief
market strategist at Carson Group in Omaha. “It’s a realization
that inflation continues to come down quickly and that is
alleviating a lot of worries regarding the economy.”

The Commerce Department’s hotly anticipated personal
consumption expenditures (PCE) report arrived largely in line
with consensus, showing softening demand and cooling inflation –
which is exactly what the Federal Reserve’s restrictive interest
rate hikes are intended to accomplish.

“(The PCE report) is another building block to the
inflation data we’ve been seeing recently,” Detrick added.
“Supply chains continue to open up and improve, opening the door
for the Fed to end its aggressive rate hiking cycle.”

Fed Chair Jerome Powell has clearly stated that the central
bank’s battle against decades-high inflation is far from over,
however. Financial markets still believe the central bank will
hike the Fed funds target rate by another 25 basis points at the
conclusion of next week’s policy meeting.

Fourth-quarter earnings season is running on all cylinders,
with 143 of the companies in the S&P 500 having reported. Of
those, 67.8% have beaten Street expectations, slightly better
than the 66% long-term average, but well below the 76% beat rate
over the past four quarters, according to Refinitiv.

Analysts now see aggregate S&P 500 earnings falling 2.9%
year-on-year, compared with the milder 1.6% annual drop seen on
Jan. 1, per Refinitiv.

According to preliminary data, the S&P 500
gained 9.86 points, or 0.24%, to end at 4,070.29 points,
while the Nasdaq Composite gained 109.30 points, or
0.95%, to 11,621.71. The Dow Jones Industrial Average
rose 25.18 points, or 0.07%, to 33,974.59.

Shares of Intel Corp plunged after the chipmaker
provided dismal earnings projections.

Chevron Corp posted record 2022 profit, but its
fourth quarter earnings fell short of expectations, dragging the
stock lower.

Rival payment companies American Express Co and Visa
Inc both reported consensus-beating results, boosting
their shares higher.

Next week, in addition to the Fed meeting and January
employment data, a string of high profile earnings reports are
on tap, notably from Apple Inc, Amazon.com,
Alphabet Inc and Meta Platforms, among
others.
(Reporting by Stephen Culp; Additonal Reporting by Bansari
Mayur Kamdar, Johann M Cherian and Shreyashi Sanyal in
Bengaluru; Editing by Aurora Ellis)