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NEW YORK, Aug.20 (Reuters) – Wall Street rebounded to close sharply higher on Friday, ending a tumultuous week over allaying concerns about whether the US Federal Reserve could start tightening its accommodative monetary policy sooner than expected .
While the three major US indexes finished solidly green, all posted weekly losses after a steep mid-week drop that pushed the S&P 500 and Dow Jones away from a series of record closing highs.
“Earlier this week, you saw traders balance their books before the Fed said it,” said Matthew Keator, managing partner of Keator Group, a wealth management firm in Lenox, Massachusetts. “And once the statement came out, you kinda saw ‘sell the rumor buy the news’.”
The leading-edge, tech-adjacent tech megacaps, which have weathered the pandemic recession better than most, have once again provided the biggest boost.
Growth stocks were also boosted by US Treasury yields, which ended the week lower amid fears the health crisis could pose a longer-than-expected obstacle to economic recovery.
Announcements from a multitude of Asian countries that they are implementing drastic measures to curb the resurgence of COVID-19 due to the rise of the highly contagious Delta variant of the disease, put a damper on stocks associated with re-engagement economic. Read more
Mixed economic data from the United States and China suggests that the recovery underway from the most brutal recession on record has passed its peak and has lost momentum.
Market participants are now looking to next week’s Jackson Hole Symposium in Wyoming, a gathering of top central bank executives, for clues from Fed Chairman Jerome Powell regarding the expected pace of the recovery and the timing of the political tightening.
“We’ve seen times in history when the Jackson Hole Symposium has garnered a lot of attention, but this year even more,” Keator added. “The Fed could take this opportunity to communicate what its plan is going forward.”
The Dow Jones Industrial Average (.DJI) gained 225.96 points, or 0.65%, to 35,120.08, the S&P 500 (.SPX) gained 35.87 points, or 0.81%, to 4.441 , 67 and the Nasdaq Composite (.IXIC) added 172.88 points, or 1.19%, to 14,714.66.
The top 11 sectors of the S&P 500 ended the session higher, with technology stocks (.SPLRCT) and utilities (.SPLRCU) posting the largest percentage gains.
The second quarter reporting season has mostly run its course, with 476 of the S&P 500 companies reporting results. Of those, 87.4% exceeded the consensus, according to data from Refinitiv.
Farm and construction equipment maker Deere & Co (DE.N) has beaten quarterly profit expectations and raised full-year guidance due to robust demand read more. Still, its shares ended the session down 2.1%.
Bristol-Myers Squibb (BMY.N) rose 1% after the US Food and Drug Administration approved the drugmaker’s cancer drug Opdivo.
U.S.-listed shares of Chinese-based tech-related companies have swayed among market participants as they digested recent sales resulting from Beijing’s ongoing regulatory crackdown, which has wiped out half a trillion dollars. dollars from Chinese markets this week. Read more
Alibaba Holding Group closed down 1.6%, while Tencent Music Entertainment Group (TME.N), Didi Global and iQiyi Inc (IQ.O) gained between 1.6% and 3.7%.
The advancing issues outnumbered the declining ones on the NYSE by a ratio of 2.37 to 1; on the Nasdaq, a ratio of 2.21 to 1 favored the advances.
The S&P 500 posted 50 new 52 week highs and 1 new low; the Nasdaq Composite recorded 59 new highs and 200 new lows.
The volume on the US stock exchanges was 8.72 billion shares, compared to an average of 9.21 billion over the last 20 trading days.
Reporting by Stephen Culp; Additional reports by Devik Jain and Medha Singh in Bangalore; Editing by Aurora Ellis
Our Standards: Thomson Reuters Trust Principles.
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