Reuters File Photo: September 17, 2019, The Wall St. Street sign is seen near the New York Stock Exchange (NYSE) in New York City, USA. Reuters / Brendon McDermide
Written by Amber Warrick
(Reuters) – Economically sensitive stocks rallied on Wall Street on Thursday as investors eased concerns about the Federal Reserve’s plans to taper, while forecasts from Accenter (NYSE 🙂 and Salesforce (NYSE 🙂 added to the positive mood.
The Fed said on Wednesday that it could start reducing its monthly bond purchases by November and that interest rates could rise faster than expected in the next year.
The central bank has also forecast inflation at 4.2% by the end of the year, more than double its target of 2.0%. Nevertheless, the bank was optimistic that economic normalcy would return within the next year.
Financial stocks were the best performers in the first trade, jumping 1.7% in anticipation of higher nding rates.
The commodity-related sectors have risen in anticipation of increased demand, as well as strong oil and metal prices due to supply constraints.
IT services provider Salseforce.com Inc. jumped 4% and was among the top enthusiasts after S&P and Dow boosted their annual revenue forecasts.
Accenture added about 2% after IC consulting firm increased its first-quarter outlook.
Investors ignored data that showed a slowdown in business activity and an increase in unemployment, in line with expectations of a slowdown in economic growth in the third quarter.
Mike Loeingart, managing director of E * Trade Financial’s investment strategy, said: “If the Fed’s position is still bearish and the economy is strong according to (recent) data, it makes sense for the Fed to return to normal.” .
Last week’s data showed a surprising jump in retail sales, suggesting that despite the impact of the delta form of coronavirus, consumer spending remains a major measure of economic growth.
“In light of the recent volatility, investors are probably looking at the taper projection and the possible 2022 rate hike as a vote of confidence that recovery is on the way,” Loingart said.
At 09:59 a.m. ET was up 419.61 points or 1.22% to 34,677.93, 44.99 points or 1.02% to 4,440.63, and 121.09 points or 0.81% to 15,018.70.
The Fed’s November deadline was widely valued by markets. Relief on the Fed, along with a default concern of Chinese property developer Evergrand, all three Wall Street indices rose nearly 1% on Wednesday.
The Dow and S&P were set for their best days in two months, as they recovered strongly from two-month lows earlier this week.
Wall Street indices are still trading lower for the month, due to the weakening trend of the season, as well as the slowdown in financial spending and economic growth.
Progress issues for the 8.8-to-1 ratio on the NYSE and the 2.7-to-1 ratio on the Nasdaq have declined the majority.
The S&P 500 posted 18 new 52-week highs and 3 new levels, while Nasdaq recorded 70 new highs and 25 new levels.