Stocks rise broadly on Wall Street ahead of Fed statement

By DAMIAN J. TROISE and ALEX VEIGA

Stocks rose broadly on Wall Street Wednesday ahead of an update from the Federal Reserve on how and when it might begin easing its extraordinary support measures for the economy.

The S&P 500 rose 1% as of 1:17 p.m. Eastern. The Dow Jones Industrial Average rose 367 points, or 1.1%, to 34,287 and the Nasdaq rose 0.8%.

Gains within the S&P 500 were broad and could potentially break a four-day losing streak for the index, if they hold. More than 90% of stocks in the index rose. Banks and technology companies led the gains. Communications companies lagged the market.

Smaller stocks did better than the broader market. The Russell 2000 rose 1.5%.

The yield on the 10-year Treasury note held steady at 1.32%. Crude oil prices rose 2.2%.

Netflix jumped 3.4% after the streaming entertainment service acquired the works of Roald Dahl, the late British author of celebrated children’s books such as “Charlie and the Chocolate Factory.”

Facebook fell 4.2% and tempered gains for communications stocks. FedEx slumped 8.7%, the biggest decline among S&P 500 stocks, after it reported sharply higher costs even as demand for shipping increased. A wide range of industrial and other companies have been dealing with higher costs because of a mix of labor and supply chain problems.

Investors’ key focus on Wednesday is the Fed’s statement on interest rate policy. The central bank has been buying bonds to keep interest rates low since the pandemic sapped the economy 18 months ago. It has signaled that it will eventually reduce those purchases, but the breadth and timing is still unknown.

Wall Street has been trying to gauge how the slowdown in the economic recovery will affect the Fed’s decision-making process. The broader market has been choppy as that question lingers amid rising cases of COVID-19 because of the highly contagious delta variant.

Investors have also been concerned about heavily indebted Chinese real estate developers and the damage they could do if they default and send ripple effects through markets. Evergrande, one of China’s biggest private sector conglomerates, said it will make a payment due Thursday, potentially easing some of those concerns.

European markets were mostly higher and Asian markets were mixed. Markets in South Korea and Hong Kong were closed for holidays.

Source: Orange County Register