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Wall Street adds to gains after Fed pledges more support to US economy

At the end of its two-day policy meeting the Fed said it maintained its interest rate target range until it is confident the economy has weathered the virus

Topics
US Federal Reserve | US economy | Wall Street

Reuters 

coronavirus, wall street, markets
The Dow Jones Industrial Average rose 105.68 points, or 0.4 per cent

added to gains on Wednesday after the repeated a pledge to use its "full range of tools" to support the economy for as long as it takes to recover from fallout of the pandemic.

At the end of its two-day policy meeting the Fed said it maintained its interest rate target range until it is confident the economy has weathered the virus and is on track to achieve its maximum employment and price stability goals.

"This was pretty much as expected. The key statement will be in September when they give some forward guidance," said Stan Shipley, Evercore ISI macro research analyst in New York.

Wall Street's major indexes were already higher before the Fed commentary, on the eve of scheduled earnings reports from Amazon.com Inc, Facebook Inc, Apple Inc and Alphabet's Google. The chief executives of all four companies also faced a congressional hearing on antitrust issues.

"You'll often see an uptick in those shares ahead of earnings and if they disappoint then they tend to sell off," said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management.

At 2:30 p.m. ET (1830 GMT), the Industrial Average rose 105.68 points, or 0.4 per cent, to 26,484.96, the gained 32.98 points, or 1.02 per cent, to 3,251.42 and the Nasdaq Composite added 124.98 points, or 1.2 per cent, to 10,527.07.

ALSO READ: Fed pledges to keep rates near zero, says recovery will depend on Covid-19

All 11 major S&P sectors were higher with financial and technology stocks leading the percentage gainers.

Investors were also focused on contentious negotiations in Washington around what should go into government's next relief plan days before enhanced unemployment benefits were set to expire.

On Tuesday, US President Donald Trump said he did not support everything in a Senate Republican proposal but would not elaborate.

Advanced Micro Devices Inc shares were up 12.6 per cent after the chipmaker raised its full-year revenue forecast and the Philadelphia chip index rose 2 per cent.

Starbucks Corp climbed 4 per cent after the coffee chain said business was "steadily recovering" worldwide and it would report a profit in the current quarter.

Of the firms that have reported results, 79.1 per cent have surpassed a low bar of quarterly profit expectations, according to Refinitiv IBES data.

Recent data pointed to a possible slowdown in business and hiring as several US states reimposed restrictions after a spike in Covid-19 infections, while deaths in the country caused by the disease surpassed 150,000 on Wednesday.

Boeing Co slipped 2.6 per cent as it slashed production on its widebody programs and reported a bigger-than-expected loss due to the fallout from the pandemic.

Advancing issues outnumbered declining ones on the NYSE by a 3.18-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.

The posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 73 new highs and 14 new lows.

First Published: Thu, July 30 2020. 00:48 IST
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