news/GOOG/2023.01.31/Wall St gains over 1% after encouraging inflation data with Fed next.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*Nasdaq posts biggest January gain since 2001*U.S. labor cost growth slows in fourth quarter*Exxon, UPS rise after results, Caterpillar slumps*Fed decision on interest rates on Wednesday*Indexes up: Dow 1.09%, S&P 500 1.46%, Nasdaq 1.67%(Adds further market data)NEW YORK, Jan 31 (Reuters) - Major U.S. stock indexes
closed over 1% higher on Tuesday as labor cost data encouraged
investors about the Federal Reserve's aggressive approach to
taming inflation a day ahead of the central bank's critical
policy decision.Investors also digested a full plate of earnings reports.
Shares of Exxon Mobil Corp and United Parcel Service Inc
rose following their respective results, while
Caterpillar Inc and McDonald's Corp ended weaker
after their results.The S&P 500 tallied its first January increase since 2019,
gaining 6.2%, while the tech-heavy Nasdaq jumped 10.7% for the
month - its biggest January percentage rise since 2001.U.S. labor costs increased at their slowest pace in a year
in the fourth quarter as wage growth slowed, Labor Department
data showed. The U.S. central bank on Wednesday is expected to
hike the Fed funds rate by 25 basis points, following a 2022 in
which the Fed aggressively boosted rates to control soaring
inflation.The labor cost data is "indicating that maybe what the Fed
has done is working and ... we’re rounding the corner on
interest rate hikes," said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia.The Dow Jones Industrial Average rose 368.95 points,
or 1.09%, to 34,086.04, the S&P 500 gained 58.83 points,
or 1.46%, to 4,076.6 and the Nasdaq Composite added
190.74 points, or 1.67%, to 11,584.55.All 11 S&P 500 sectors ended in positive territory, led by
materials and consumer discretionary, both
up over 2%.Aside from the Fed's rate decision on Wednesday, Chair
Jerome Powell's news conference will be scrutinized for whether
the rate-hiking cycle may be coming to a close and for signs of
how long rates could stay elevated."Jerome Powell and team are probably looking at this easing
of financial conditions that has happened over the last month,
and we will see if they try to push back against it to any
extent," said Mona Mahajan, senior investment strategist at
Edward Jones. "I don’t think they would want markets to move up
too far, too fast either."In earnings news, Exxon Mobil shares rose 2.2% after the oil
major posted a $56 billion net profit for 2022, setting not only
a company record but a historic high for the Western oil
industry.United Parcel Service shares climbed 4.7% after its
quarterly profit topped estimates, while General Motors Co
shares jumped 8.3% after it forecast
stronger-than-expected earnings for 2023.Caterpillar shares sank 3.5% as the machinery maker's
fourth-quarter earnings slid by 29%. McDonald's shares dropped
1.3% after the burger chain warned inflation will weigh on
margins in 2023.A busy week for markets will also include reports in coming
days from Apple Inc, Amazon.com Inc and
Alphabet Inc, central bank meetings in Europe and the
monthly U.S. employment report.Advancing issues outnumbered declining ones on the NYSE by a
4.91-to-1 ratio; on Nasdaq, a 3.12-to-1 ratio favored advancers.The S&P 500 posted 10 new 52-week highs and no new lows; the
Nasdaq Composite recorded 100 new highs and 25 new lows.About 12 billion shares changed hands in U.S. exchanges,
compared with the 11.4 billion daily average over the last 20
sessions.
(Reporting by Lewis Krauskopf in New York, and Johann M Cherian
and Shreyashi Sanyal in Bengaluru
Editing by Maju Samuel and Matthew Lewis)