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Dow hits 2023 peak as Salesforce jumps, inflation eases

Credit: REUTERS/Lucas Jackson

By Shristi Achar A and Amruta Khandekar

Nov 30 (Reuters) - The Dow Jones industrials index hit its highest level in 2023 on Thursday, as Salesforce jumped on an upbeat profit forecast and a new report offered further evidence of easing inflation.

SalesforceCRM.N jumped 6.7% as the cloud-based software firm raised its annual profit forecast and beat third-quarter estimates, benefiting from strong demand for its cloud and business products.

While the Dow rose to 35,725.11 points, crossing its intraday high of 35,679.13 points hit in August, all three main indexes were on course for their strongest November since 2020.

The S&P 500 .SPX and the tech-heavy Nasdaq .IXIC were also poised for their biggest monthly percentage gain since July 2022 and January 2023, respectively, on signs of cooling price pressures.

The personal consumption expenditure (PCE) index - the Fed's preferred inflation gauge - showed inflation remained unchanged in October on a monthly basis, against economists' projections of a 0.1% increase.

Core inflation, which excludes volatile food and energy prices, rose 0.2% on a monthly basis, in line with estimates.

This led traders to hold their bets the Federal Reserve will keep interest rates steady for three more meetings before starting to cut them in May.

The latest weekly jobless claims also hinted at a softening labor market. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 218,000 for the week ended Nov. 25, up from 211,000 last week.

"Continuing claims are at a high level now and inflation is at a low level. It's basically 'box the Fed out of taking any further action'," said Thomas Hayes, chairman at Great Hill Capital LLC.

"Now the focus becomes when, (and) are they going to need to cut (rates) and if they are going to need to cut, on what basis is it."

But most megacap stocks edged lower, with Nvidia NVDA.O down 2.8% and leading declines, keeping the S&P 500 and Nasdaq under pressure. Higher U.S. Treasury yields, which make returns on stocks less appealing, weighed on equities.

Mixed messaging from Fed officials have kept markets on edge in recent days.

Both San Francisco Fed President Mary Daly and Bank of New York President John Williams kept the door open to further tightening on Thursday.

Among the 11 major S&P 500 sectors, the health sub-index .SPXHC rose 0.9% and was the top gainer, while communication services .SPLRCL led losses, down 1.5%.

At 11:40 a.m. ET, the Dow Jones Industrial Average .DJI was up 296.66 points, or 0.84%, at 35,727.08, the S&P 500 .SPX was down 5.68 points, or 0.12%, at 4,544.90, and the Nasdaq Composite .IXIC was down 99.75 points, or 0.70%, at 14,158.74.

Data cloud company SnowflakeSNOW.N added 4.5% after it forecast fourth-quarter product revenue above Street estimates.

Pinterest PINS.N and Snap Inc SNAP.N rose 1.2% and 6.3%, respectively, after Jefferies upgraded the social media firms to "buy" from "hold."

Advancing issues outnumbered decliners by a 1.43-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and two new lows, while the Nasdaq recorded 44 new highs and 79 new lows.

S&P 500 performance during past PCE data release in 2023 https://tmsnrt.rs/46xP4Pz

(Reporting by Shristi Achar A and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)

((Shristi.AcharA@thomsonreuters.com https://twitter.com/ShristiAchar;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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