NEW YORK,. An Apple-led tech rally pushed Wall Street higher yesterday as jitters over the Federal Reserve’s forecast of an economic slowdown were calmed by upbeat economic data.
All three major US stock indexes ended the session in the black, with the Nasdaq showing its fifth straight advance, the Dow posting its best day in over a month and the benchmark S&P 500 closing less than 3 per cent below its all-time high set in September.
On Wednesday, the Fed surprised investors with a policy statement that was more dovish than expected, as it anticipated no further interest rate hikes this year due to signs of softness in the US economy.
But worries about the central bank’s signals on the economy were mollified by upbeat data on yesterday. In separate reports, initial claims for jobless benefits fell more than expected and mid-Atlantic factory activity rebounded sharply.
Apple Inc led the tech sector’s advance, rising 3.7 per cent ahead of the company’s expected streaming service debut next week.
“Today the market move is (due to) Apple’s weighting in the Dow, the absence of bad news and the market reacting to the Fed’s dovish tone,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
But Keator would remind investors that the Fed was more hawkish just a few months ago. “The market should maybe be a bit more measured in extrapolating too much from the Fed’s dovish stance because that could change.”
Chipmakers also gave technology stocks a lift after Micron Technology Inc predicted a recovery in the memory market as it reported better-than-expected quarterly earnings. Micron’s stock jumped 9.8 per cent.
The Philadelphia SE Semiconductor Index rose 3.5 per cent, its biggest percentage gain since late January. The index has surged by nearly 25 percent so far this year.
The Dow Jones Industrial Average rose 216.84 points, or 0.84 per cent, to 25,962.51, the S&P 500 gained 30.65 points, or 1.09 per cent, to 2,854.88 and the Nasdaq Composite added 109.99 points, or 1.42 per cent, to 7,838.96.
Of the 11 major sectors in the S&P 500, all but financials ended the session in positive territory.
Rate-sensitive banks came under pressure as the Fed’s decision to cease monetary tightening caused the US Treasuries yield curve to flatten to its narrowest spread since August 2007.
Conagra Brands Inc beat analysts’ quarterly earnings estimates as the packaged food maker raised prices to offset rising costs, sending its shares up 12.8 per cent.
Shares of Biogen Inc plunged 29.2 per cent after the company announced it would halt late-stage trials for its experimental Alzheimer’s drug.
Strauss & Co soared 31.8 per cent as investors welcomed the iconic jeans maker back to the stock market. The 165-year-old company’s IPO was priced at US$17 (RM69.09) per share, and the shares closed at US$22.41.
Ford Motor Co gained 2.1 per cent after the automaker announced it was hiring its first outsider as chief financial officer in seven decades.
Advancing issues outnumbered declining ones on the NYSE by a 2.45-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favoured advancers.
The S&P 500 posted 61 new 52-week highs and three new lows; the Nasdaq Composite recorded 85 new highs and 34 new lows.
Volume on US exchanges was 7.59 billion shares, compared to the 7.62 billion average over the last 20 trading days. — Reuters