Stocks got back on track ahead of the Thanksgiving holiday as encouraging economic data and plunging oil prices more than offset some downbeat reactions to corporate earnings reports.
The market's mood was brightened considerably early in the session by at least a couple of economic reports – durable goods and weekly jobless claims – pointing to a "soft landing" for the U.S. economy.
"Stocks are resuming their run as market bulls shrug off yesterday’s selling pressure with this morning’s economic data supporting optimism," said José Torres, senior economist at Interactive Brokers, in a note. "The durable goods and labor data imply that the economy is slowing to a potentially sustainable level rather than falling into recession."
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In addition to the inflation relief seen in durable goods orders, market participants also enjoyed another steep drop in oil prices after the Organization of the Petroleum Exporting Countries and allies (OPEC+) delayed a meeting to discuss further production cuts.
The sharp decline in oil prices – U.S. benchmark crude futures fell as much as 5% at one point Wednesday – "further dampens inflationary pressures," Torres notes.
In corporate news, shares in John Deere (DE) plunged 3.1% after the manufacturer of heavy agricultural machinery offered disappointing earnings and revenue forecasts for fiscal 2024. Meanwhile, shares in Nvidia (NVDA) retreated 2.5% after the chipmaker's forecast failed to eclipse Wall Street's already lofty expectations.
At the closing bell, the blue-chip Dow Jones Industrial Average added 0.5% to finish at 35,273, while the broader S&P 500 gained 0.4% to 4,556. The tech-heavy Nasdaq Composite rose 0.5% to end at 14,265.
The U.S. stock and bond markets will be closed for Thanksgiving and will host abbreviated sessions on Black Friday.
Best cash cow stocks
As investors look to recalibrate and rebalance their holdings for the new year, they would do well to take a closer look at stocks that are real cash cows.
As Kiplinger contributing writer Mark R. Hake notes, "investors love cash cows – companies that generate consistent free cash flow. These stocks tend to do well over time."
That's because companies with high free cash flow margins can afford to make dividend payments and acquisitions, buy back stock, reduce debt, or just let the cash pile up on the balance sheet.
If you're looking for companies that generate impressive free cash flow and put it to good use via dividends, buybacks and more, check out these top cash cow stocks.
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