Stocks are hovering around highs amid encouraging reports

NEW YORK – U.S. stocks hovered around record highs on Thursday after recent signals suggested the U.S. economy continues to hum.

The S&P 500 ended virtually unchanged after flirting with its all-time high for most of the day. The Dow Jones Industrial Average added 161 points, or 0.4%, to its own record set the previous day, while the Nasdaq Composite was almost unchanged.

Nvidia and other chip industry companies were among the strongest in the market after global heavyweight Taiwan Semiconductor Manufacturing Co. reported higher-than-analysts-expected earnings for its latest quarter. TSMC saw strong demand related to smartphones and artificial intelligence, and its U.S.-traded shares rose 9.8%.

It was a significant turnaround from earlier in the week, when a warning from a major Dutch chip industry supplier, ASML, sent shares lower across the industry.

Nvidia’s 0.9% gain was the single biggest force pushing the S&P 500 higher on Thursday.

But a 1.4% decline at Google parent Alphabet and a 10.6% decline at Elevance Health helped keep stock indexes under control.

In the bond market, Treasury yields rose following recent encouraging reports on the US economy.

U.S. retailers posted more sales in September than in August, and underlying growth trends in the data were better than economists expected. According to Gary Schlossberg, market strategist at Wells Fargo Investment Institute, the strength was “all the more impressive given tight household finances, particularly among lower-income buyers, and pre-election jitters.”

Meanwhile, a separate report said fewer U.S. workers filed for unemployment benefits last week, a sign that layoffs nationwide are relatively small and are not damaging the labor market.

Such data reinforces the hope that has catapulted U.S. stocks to record highs: that the economy could escape the worst inflation in generations and end without a recession that many investors had seen as all but inevitable. And with the Federal Reserve now cutting interest rates to keep the economy afloat, optimists believe stocks can rise even further.

Critics, on the other hand, warn that share prices appear too expensive given that they have risen much faster than company profits.

Lower interest rates can provide relief to the economy, increase the price of investments and make borrowing bills more cost-effective for households and businesses. And with a few exceptions, interest rates are falling everywhere in the world.

The European Central Bank cut its key interest rate by a quarter of a percentage point on Thursday.

This helped stock indices rise by 1.2% in France and by 0.8% in Germany.

They halted a losing streak that began today on Asian stock markets, where Japan’s Nikkei 225 fell 0.7% and Hong Kong’s Hang Seng fell 1%.

On Wall Street, insurer Travelers was the main reason the Dow set another record. Shares rose 9% after reporting higher earnings and revenue than analysts expected for the latest quarter. Higher income from its investments and elsewhere helped cover larger losses from Hurricane Helene and severe wind and hail storms in several states.

Blackstone also rose on indexes after the investor in real estate, hedge funds and other alternative investments reported higher-than-expected profits. Shares rose 6.3% after Chief Executive Stephen Schwarzman said there was broad-based acceleration across all businesses.

All told, the S&P 500 slipped 1.00, or less than 0.1%, to 5,841.47. The Dow gained 161.35 points, or 0.4%, to 43,239.05, and the Nasdaq Composite gained 6.53, or less than 0.1%, to 18,373.61.

In the bond market, the 10-year Treasury yield rose to 4.09% from 4.02% late Wednesday. The two-year Treasury yield, which is more closely aligned with expectations of Fed action, rose to 3.98% from 3.94%.