Dow ends shy of 32,000 milestone, books record as Powell testimony awakes bulls on Wall Street
The Dow Jones Industrial Average on Wednesday closed at a record, just shy of the 32,000 milestone, after Federal Reserve officials helped calm frayed market nerves after a run-up in bond yields briefly unsettled the bullish investing mood that’s prevailed for weeks on Wall Street. Chairman Jerome Powell’s second day of dovish testimony helped give a boost to major benchmarks and the Fed’s No. 2, Richard Clarida, said the economy is primed to show big improvement this year, owing to more Americans getting vaccinated and the passage of fiscal-spending packages.
- The Dow Jones Industrial Average DJIA, +1.35% rose 424.51 points, or 1.4%, to close at a record 31,961.86, its 10th of the year.
- The S&P 500 SPX, +1.14% advanced 44.06 points, or 1.1%, to end at 3,925.43, extending its win streak to a second day.
- The Nasdaq Composite COMP, +0.99% added 132.77 points, up 1%, finishing at 13,597.97 to snap a 2-day losing streak.
The Dow on Tuesday erased a loss of more than 360 points to eke out a positive finish, while the S&P 500 snapped a five-day losing streak and the Nasdaq Composite trimmed a loss of nearly 4% to end the session only 0.5% lower. The bulls were back in charge on Wall Street.
Fed Chair Powell said the focus remains on helping the economy heal from the pandemic, and that the time isn’t right to worry about the growing national deficit or climbing bond yields, helping stocks extend gains.
“The time to give priority to those concerns isn’t now,” Powell told a House committee on Wednesday, during his second day of testimony to Congress on the outlook for the economy and the central bank’s monetary policy. Meanwhile, Fed Vice Chairman Richard Clarida said in a speech to the U.S. Chamber of Commerce on Wednesday that the downside risk to the outlook for the economy in 2021 has diminished amid “the development of several effective vaccines and the passage by the Congress in late December of a package of fiscal relief measures.” Bond yields edged higher again Wednesday, while stocks shrugged off earlier losses. “What Powell has been saying is that bond yields are rising for the right reason,” said Patrick Leary, chief market strategist and senior trader at broker-dealer Incapital, pointing to improved economic data and optimism around the ramping up vaccine rollout. Powell’s second day of testimony reiterated themes from Tuesday, namely that the economy remained far off the Fed’s employment and inflation goals, while giving no indication a spike in bond yields would prompt the central bank to begin tapering its asset-buying program. Fears the Fed could move to scale back stimulus sooner than anticipated had been blamed for the stock market’s recent wobble, which hit highflying, tech-oriented and growth shares hardest, while stocks more sensitive to the economic cycle benefited. Fed Gov. Lael Brainard on Wednesday also emphasized the need for continued fiscal and monetary support for the U.S. economy, which she said remains far from achieving the central bank’s employment and inflation goals, in lecture at Harvard. Nick Note: Do not miss the boat. The biggest stock market rally ever is coming… the vaccines work and the captives will be set free. So for balls to the walls speculates its party time. Sleepy ETF traders you are getting set for the biggest wipeout ever… after the last leg of this mindless rally… Do you not get it the markets has got to move against you so you can get your positions. this game is losing money till the markets gets the news you see but its not seeing yet. this is speculating and you can expect big draw downs. Investing is a steady up move if you only want to make 2 or 3% on your money