Stocks Climb on Interest Rate Hopes    11/25 15:38

   The U.S. stock market climbed again Tuesday on hopes for a coming cut to 
interest rates.

   NEW YORK (AP) -- The U.S. stock market climbed again Tuesday on hopes for a 
coming cut to interest rates.

   The S&P 500 rose 0.9% after breaking out of a morning lull and is back 
within 1.8% of its all-time high. The Dow Jones Industrial Average rallied 664 
points, or 1.4%, and the Nasdaq composite gained 0.7%.

   Stocks got a boost from easing yields in the bond market. Lower interest 
rates can cover up many sins in financial markets, including prices going too 
high, and hopes are strong that the Federal Reserve will cut its main interest 
rate at its next meeting to juice the economy further.

   A raft of mixed economic data on Tuesday left traders betting on a nearly 
83% probability that the Fed will cut in December, according to data from CME 
Group. That's roughly the same as a day before and up sharply from the coin 
flip's chance that they saw just a week ago.

   One of Tuesday's reports said that shoppers bought less at U.S. retailers in 
September than economists expected. Another said confidence among U.S. 
consumers worsened by more in November than expected, a second signal that the 
economy could potentially use the help of lower interest rates.

   Easier rates can boost the economy by encouraging households and companies 
to borrow more and investors to pay higher prices for investments than they 
would otherwise.

   A third report, meanwhile, said inflation at the wholesale level was a touch 
worse in September than economists expected, but a closely tracked underlying 
trend was slightly better. That's important because lower interest rates can 
make inflation worse, and high inflation is the main deterrent that could keep 
the Fed from cutting rates.

   After taking all the data together, economists suggested the Fed and its 
chair, Jerome Powell, could be leaning toward cutting rates on Dec. 10. The Fed 
has already cut rates twice this year in hopes of shoring up the slowing job 
market.

   "Taking a pause on rate cuts would probably do more damage to sentiment than 
a cut would help," according to Brian Jacobsen, chief economist at Annex Wealth 
Management, who also said "Powell doesn't need to be the Grinch that stole 
Christmas."

   Easier interest rates can give particularly big boosts to smaller companies, 
because many of them need to borrow to grow. The Russell 2000 index of the 
smallest U.S. stocks jumped 2.1% to lead the market.

   Elsewhere on Wall Street, several retailers leaped after delivering stronger 
profits for the summer than analysts expected.

   Abercrombie & Fitch soared 37.5% after the apparel seller reported a better 
profit than expected. It also raised the bottom end of its forecasted range for 
revenue and profit over the full year.

   Kohl's surged 42.5% after reporting a profit for the latest quarter, when 
analysts were expecting a loss. Best Buy rose 5.3% after boosting its profit 
forecast for the full year following a better-than-expected third quarter, 
citing strength across computing, gaming and mobile phones.

   Dick's Sporting Goods erased an early drop of 4% to add 0.2%. It raised its 
forecast for results at its Dick's stores, though its purchase of Foot Locker 
is requiring some work. Executive Chairman Ed Stack said the company is 
"cleaning out the garage" at Foot Locker by clearing inventory, closing poorly 
performing stores and making other moves.

   Swings also continued in the artificial-intelligence industry, which has 
battled concerns that too many dollars are pouring into data centers and may 
not produce the revolution of bigger profits and productivity that proponents 
are predicting.

   Alphabet rose another 1.5%, continuing a strong run on excitement about its 
recently released Gemini AI model. Chinese giant Alibaba, meanwhile, saw its 
stock that trades in the United States fall 2.3% after losing an early gain. It 
reported stronger revenue than analysts expected for the latest quarter thanks 
in part to the AI boom, but its overall profit fell short of forecasts.

   Some chip companies dropped sharply following a report from The Information 
that Meta Platforms is in talks to spend billions of dollars on AI chips from 
Alphabet instead of them. Nvidia sank 2.6% and Advanced Micro Devices dropped 
4.1%.

   All told, the S&P 500 rose 60.76 points to 6,765.88. The Dow Jones 
Industrial Average rallied 664.18 to 47,112.45, and the Nasdaq composite gained 
153.59 to 23,025.59.

   In the bond market, the yield on the 10-year Treasury eased to 4.00% from 
4.04% late Monday.

   In stock markets abroad, indexes rose across Europe and Asia. Germany's DAX 
returned 1%, and stocks in Shanghai climbed 0.9% for two of the world's bigger 
moves.