news/AMZN/2023.01.31/Wall St gains after encouraging inflation data with Fed next.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*U.S. labor cost growth slows in fourth quarter*McDonald's, Caterpillar slip after earnings*Exxon, GM, UPS rise after their results*Fed decision on interest rates on Wednesday(Recasts with close of U.S. trading)NEW YORK, Jan 31 (Reuters) - Major U.S. stock indexes
closed higher on Tuesday as labor cost data encouraged investors
about the Federal Reserve's aggressive approach to taming
inflation a day ahead of the central bank's critical policy
decision.Investors also digested a full plate of earnings reports,
including share-price gains in Exxon Mobil Corp and
United Parcel Service Inc following their results,
countered by declines in Caterpillar Inc and McDonald's
Corp.U.S. labor costs increased at their slowest pace in a year
in the fourth quarter as wage growth slowed, Labor Department
data showed. The U.S. central bank on Wednesday is expected to
hike the Fed funds rate by 25 basis points, following a 2022 in
which the Fed aggressively boosted rates to control soaring
inflation.The labor cost data is "indicating that maybe what the Fed
has done is working and ... we’re rounding the corner on
interest rate hikes," said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia.According to preliminary data, the S&P 500
gained 59.39 points, or 1.48%, to end at 4,077.16 points,
while the Nasdaq Composite gained 190.99 points, or
1.68%, to 11,584.55. The Dow Jones Industrial Average
rose 371.04 points, or 1.10%, to 34,088.13.The S&P 500 posted its first increase for the month of
January since 2019, following a brutal 2022 in which the
benchmark index sank 19.4%.Aside from the Fed's rate decision on Wednesday, Chair
Jerome Powell's news conference will be scrutinized for whether
the rate-hiking cycle may be coming to a close and for signs of
how long rates could stay elevated."Jerome Powell and team are probably looking at this easing
of financial conditions that has happened over the last month,
and we will see if they try to push back against it to any
extent," said Mona Mahajan, senior investment strategist at
Edward Jones. "I don’t think they would want markets to move up
too far, too fast either."In earnings news, Exxon Mobil shares rose after the oil
major posted a $56 billion net profit for 2022, setting not only
a company record but a historic high for the Western oil
industry.United Parcel Service shares climbed after its quarterly
profit topped estimates, while General Motors Co shares
jumped after it forecast stronger-than-expected earnings for
2023.Caterpillar shares sank as the machinery maker's
fourth-quarter earnings slid by 29%. McDonald's shares dropped
after the burger chain warned inflation will weigh on margins in
2023.A busy week for markets will also include reports in coming
days from Apple Inc, Amazon.com Inc and
Alphabet Inc, central bank meetings in Europe and the
monthly U.S. employment report.
(Reporting by Lewis Krauskopf in New York, and Johann M Cherian
and Shreyashi Sanyal in Bengaluru
Editing by Maju Samuel and Matthew Lewis)