The US stocks recovered early losses to finish mixed on Tuesday, 23 February 2021, as investors responded positively to the Federal Reserve Chair Jerome Powell's statement that interest rates will remain at near-zero levels and the Fed will continue its asset purchases at the current rate until "substantial further progress" has been made toward the country back to full employment. However, market gains capped as remained concerns about the outlook for inflation and the potential for higher interest rates due to the recent increase in bond yields.
At the close of trade, the Dow Jones Industrial Average index rose 15.66 points, or 0.05%, to 31,537.35. The S&P500 index added 4.87 points, or 0.13%, to 3,881.37.
The tech-heavy Nasdaq Composite Index dropped 67.85 points, or 0.5%, to 13,465.20.
The US market fell in early trade on Tuesday as investors sold off mega-cap growth stocks on valuation concerns. However, the market recovered earlier losses after US Fed Chair Powell relieved some of the concerns about higher interest rates and inflation. The Federal Reserve Chair Jerome Powell's said in prepared remarks before the Senate Banking Committee that interest rates will remain at near-zero levels and the Fed will continue its asset purchases at the current rate until "substantial further progress" has been made toward its goals of maximum employment and price stability.
Of the 11 major sectors in the S&P 500, seven closed in positive territory, but consumer discretionary and tech shares suffered the largest percentage losses.
Market-leading growth stocks, which thrived amid pandemic-related lockdowns, weighed on stocks for much of the day as investors favored shares that stand to gain most as ongoing vaccine deployment allows economic restrictions to be lifted.
ECONOMIC NEWS: The Conference Board released a report showing consumer confidence has improved more than expected in the month of February. The Conference Board said its consumer confidence index rose to 91.3 in February from a downwardly revised 88.9 in January.
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