US STOCKS-Wall Street up on hopes of Fed backing; FedEx jumpsReuters | Updated: 16-09-2020 20:03 IST | Created: 16-09-2020 20:03 IST
Wall Street's main indexes rose on Wednesday as investors hoped the Federal Reserve would continue to keep interest rates low for a prolonged period, with upbeat quarterly results from FedEx also boosting sentiment. The central bank's two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.
The Federal Open Market Committee will release its policy statement and economic projections at 2 p.m. ET (1800 GMT), followed by Fed Chair Jerome Powell's virtual news briefing half an hour later. "The Fed has made abundantly clear that policy rates will remain pinned near zero for as far as the eye can see," said Seema Shah, chief strategist at Principal Global Investors.
"Yet, markets will be impatient for additional guidance on how they will utilize their broader toolkit if they want inflation to hit 2% over the forecast horizon, let alone overshoot it." Wall Street's main indexes have bounced after a tech-driven slump that pushed the Nasdaq Composite index into correction territory in just three sessions.
After declining for two weeks in a row, the benchmark S&P 500 has rebounded 1.8% in the past two sessions, but mixed data has kept investors on edge about the pace of an economic recovery. Latest figures showed U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining.
At 10:09 a.m. ET the Dow Jones Industrial Average was up 116.75 points, or 0.42%, at 28,112.35, the S&P 500 was up 13.47 points, or 0.40%, at 3,414.67 and the Nasdaq Composite was up 30.71 points, or 0.27%, at 11,221.04. Eight of the 11 S&P sectors gained in early trading, with the S&P 500 technology subindex edging up 0.1%.
Delivery firm FedEx Corp jumped 7.2% after reporting a bigger-than-expected quarterly profit, helped in part by price hikes and lower fuel costs. Shares in rival United Parcel Service Inc gained 1.1%. Boeing Co dipped 0.2%, after a U.S. House panel concluded that two 737 MAX crashes were the "horrific culmination" of failures by the planemaker and the Federal Aviation Administration.
Apple Inc dropped 0.6%, after ending the previous session marginally higher, as it rolled out a new virtual fitness service and a bundle of all its subscriptions, Apple One. Eastman Kodak Co jumped 63.6% after a law firm hired by the photography equipment maker said its chief executive officer's securities transactions around the time the company learned it could receive a $765 million government loan did not violate internal policies.
Advancing issues outnumbered decliners for a 2.71-to-1 ratio on the NYSE and a 2.88-to-1 ratio on the Nasdaq. The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 45 new highs and seven new lows.