MARKET SNAPSHOT: Stocks Hold Modest Gains As Data Keep December Rate Hike On Table

By Ellie Ismailidou and Carla Mozee, MarketWatch

Hewlett-Packard shares tumble after weak quarterly sales

U.S. stocks held modest gains Wednesday afternoon as a pre-Thanksgiving round of U.S. economic data were interpreted as solid enough to keep the Federal Reserve on track for a potential interest-rate increase in December.

The S&P 500 rose 3 points, or 0.1%, to 2,092. The Dow Jones Industrial Average rose 29 points, or 0.2%, to 17,841, and the Nasdaq Composite was up 18 points, or 0.4%, at 5,121.

U.S. orders for long-lasting or durable goods rebounded (http://www.marketwatch.com/story/durable-goods-orders-climb-3-in-october-2015-11-25)in October to show the first increase in three months, led by a surge in demand for large, commercial airplanes. Meanwhile, the number of people who applied for U.S. unemployment benefits (http://www.marketwatch.com/story/us-jobless-claims-drop-12000-to-260000-2015-11-25) fell by 12,000 to 260,000 in the week before Thanksgiving, indicating that the labor market is continuing its steady path to recovery.

Wednesday's data keep the Fed on track to raise rates in December, particularly as they "offer a strong gauge of the employment situation, which means we could see a 200,000 job gain in November's jobs report next week," said Douglas Coté, chief market strategist at Voya Investment Management.

But inflation, as gauged by the personal consumption expenditure price index, edged up just 0.1% in October, the Commerce Department said on Wednesday morning. The PCE price index is considered by analysts as the Fed's preferred inflation measure, as the central bank considers raising rates for the first time in nearly a decade.

The PCE index has risen just 0.2% in the past 12 months (http://www.marketwatch.com/story/consumer-spending-rises-scant-01-in-october-2015-11-25), while the core PCE index that excludes food and energy was flat, and it's up 1.3% over the past year, well below the Fed's 2% inflation target.

As for the weak PCE, "the Fed's view seems to be that this is a lagging indicator," Coté said, with policy makers viewing it as transitory, particularly in the context of strong wage gains in the October jobs report.

Read: The Fed is ready for higher rates--are you? (http://www.marketwatch.com/story/the-fed-is-ready-for-higher-rates-are-you-2015-11-24)

(http://www.marketwatch.com/story/the-fed-is-ready-for-higher-rates-are-you-2015-11-24)Meanwhile, a U.S. State Department travel alert (http://travel.state.gov/content/passports/en/alertswarnings/worldwide-travel-alert.html), which warned U.S. citizens to be cautious when traveling due to reports of planned terrorist attacks, pushed down airline shares, with four airlines among the worst performers on the Dow Jones Transportation Average .

Shares of Delta Air Lines, Inc. (DAL) were down 1.3% in the afternoon, while JetBlue Airways Corporation (JBLU) fell 1.1%, United Continental Holdings Inc. (UAL) shares lost 1% and those of Southwest Airlines Co (LUV) declined 0.8%.

Also read: American, Delta and United stocks expected to underperform after travel alert (http://www.marketwatch.com/story/american-delta-and-united-stocks-expected-to-underperform-after-travel-alert-2015-11-25)

Stocks ended slightly higher Tuesday (http://www.marketwatch.com/story/wall-street-set-for-muted-open-after-turkey-shoots-down-jet-2015-11-24), aided by gains for the energy sector as oil prices surged 3% in the wake of Turkey's downing of a Russian jet fighter near the Syrian border.

Trading will closed Thursday for Thanksgiving Day, and open for a half-day on Friday. No economic data are scheduled for release on either day.

Read: When do markets close Thanksgiving Week? (http://www.marketwatch.com/story/when-do-markets-close-around-thanksgiving-2015-11-23)

(http://www.marketwatch.com/story/when-do-markets-close-around-thanksgiving-2015-11-23)Data: New home sales were up 10.7% (http://www.marketwatch.com/story/sales-of-new-homes-leap-107-to-495000-annual-rate-2015-11-25) for the month of October, but median prices fell 7% for the year, the Commerce Department said Wednesday.

Consumer sentiment rose in November, but not as much as previously indicated, according to the latest monthly survey by the University of Michigan (http://www.marketwatch.com/story/consumer-sentiment-improves-in-november---but-with-a-hitch-2015-11-25).

Corporates: Hewlett-Packard Co. (HPQ) shares fell 13% in afternoon trade after the tech heavyweight late Tuesday reported weak quarterly sales (http://www.marketwatch.com/story/hp-inc-stock-dives-following-weak-quarterly-sales-2015-11-24). But shares of Hewlett Packard Enterprise Co. (HPE), which now houses the cloud and enterprise-market properties of the former Hewlett-Packard Co., rose 2.3%. Also read: For Hewlett-Packard, a tale of two diverging stocks (http://www.marketwatch.com/story/for-hewlett-packard-a-tale-of-two-diverging-stocks-2015-11-25)

Deere & Co. (DE) shares jumped 3.5% after the heavy equipment maker's fourth-quarter profit and sales leapt above expectations (http://www.marketwatch.com/story/deere-shares-up-6-in-premarket-after-profit-and-sales-beat-estimates-2015-11-25). Cost cuts helped offset weakness in global markets for farm and construction equipment.

Shares in Baxalta Inc. (BXLT) were up 0.3% in the afternoon, after rising as high as 2.7% in the morning following a report that Dublin-based Shire PLC (SHPG) is preparing a renewed takeover bid (http://www.marketwatch.com/story/shire-shares-rise-on-report-of-renewed-baxalta-bid-2015-11-25) for the U.S. biotech company. U.S.-listed shares of Shire (SHPG)(SHPG) slipped 0.05%.

Other markets: Most Asian markets slipped Wednesday, still feeling the weight of geopolitical tensions, although a rise in oil prices overnight helped some energy shares. The Nikkei Average fell 0.4%, for its first loss in four sessions.

European stocks closed higher (http://www.marketwatch.com/story/european-stocks-gain-with-travel-shares-finding-relief-2015-11-25), recovering from Tuesday's sharp losses, (http://www.marketwatch.com/story/european-stocks-gain-with-travel-shares-finding-relief-2015-11-25)after Turkey's president said the country isn't looking to escalate tensions with Russia.

Gold prices were off 0.3%, while oil futures pared losses. The U.S. dollar index rose 0.2% to 99.74, after the euro fell briefly below $1.06 in the morning. In the afternoon the euro was trading at $1.062.

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(END) Dow Jones Newswires

November 25, 2015 13:29 ET (18:29 GMT)

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