Wall Street closes higher after business activity data
Gap surges after raising annual sales forecast
Intuit drops after forecasting Q2 results below estimates
Small caps touch over one-week high
Three major indexes post weekly gains
Updates as of the close
By Abigail Summerville and Johann M Cherian
Nov 22 (Reuters) - Wall Street closed higher on Friday, with all three major indexes posting weekly gains,as investors took comfort fromdata pointing to robust economic activity in the world's biggest economy.
A measure of business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump's administration next year.
The domestically focused small-cap Russell 2000 index .RUT rose and outperformed large-cap indexes. The index hit its highest in more than a week and was set for weekly advances.
Meanwhile, Alphabet GOOGL.O fell followingThursday's 4% drop, as the U.S. Departmentof Justice argued to a judge the company was monopolizing online search.
AI bellwether Nvidia NVDA.O also slipped in choppy trading followingits quarterly forecast on Wednesday.
An index tracking S&P 500 value stocks .IVX rose asinvestors rotated out of their growth peers .IGX.
"I’ve been looking for this leadership change to go from technology to everything else. I think we may be in the midst of that shift. Small caps are acting much better, values are acting better," said Mark Hackett, Chief of Investment Research at Nationwide.
According to preliminary data, the S&P 500 .SPX gained 19.55 points, or 0.33%, to end at 5,968.26 points, while the Nasdaq Composite .IXIC gained 26.45 points, or 0.14%, to 18,998.87. The Dow Jones Industrial Average .DJI rose 423.28 points, or 0.96%, to 44,293.63.
The S&P and the Dow reached one-week highs.
Expectations on the Federal Reserve's policy move in December have recently swayed between a pause and a cut, as investors weighed the likely impact of Trump's plans on price pressures.
There is a 59.6% probability the central bank will lower borrowing costs by 25 basis points, as per the CME Group's FedWatch Tool.
Geopolitics were top of mind this week as investorsmonitored a missile exchange between Ukraine and Russia, after Moscow lowered its threshold for a nuclear retaliation. The markets are also awaiting Trump's Treasury Secretary pick.
"The fact that we’ve been calm on a nice, steady stair step pattern higher is very encouraging and reflective of the fact that investors aren’t acting with the emotion that they could be given the amount of uncertainties we’ve faced," Hackett said.
In company news, Gap Inc GAP.N jumped after the Old Navy parent raised its annual sales forecast and said the holiday season was off to a "strong start".
Intuit INTU.O fell afterthe TurboTax parent projected second-quarter revenue and profit below Wall Street estimates on Thursday.
Reporting by Abigail Summerville in New York; additional reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by David Gregorio
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