Wall Street bounces back as taper jitters fade By Reuters
© Reuters. Signage hangs over the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 19, 2021. REUTERS/Andrew Kelly
By Stephen Culp
NEW YORK (Reuters) – Wall Street capped a tumultuous week with a broad-based rally as investors largely shrugged off the looming threat of the COVID-19 Delta variant and signals from the U.S. Federal Reserve that it could begin tightening its dovish monetary policy sooner than expected.
While all three major U.S. indexes were in positive territory, all were on course to post weekly losses after a steep sell-off pulled the and the Dow Industrial away from a string of record closing highs.
“We’ve seen some profit taking since Aug. 16, and today we’re seeing some buying on that dip, in the belief that we’re still headed higher,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
Market-leading tech and tech-adjacent megacaps, which weathered the pandemic recession better than most, were once again doing the heavy lifting.
Growth stocks were also given a boost by U.S. Treasury yields, which were on track end the week lower due to concerns the health crisis could be a longer than expected hindrance to economic revival.
Announcements from a host of Asian nations that they are implementing drastic measures to curb the resurgence of COVID-19 due to the rise of the disease’s highly contagious Delta variant, put a damper on stocks associated with economic re-engagement.
Mixed economic data from the U.S. and China suggested the ongoing recovery from the most abrupt recession on record has passed its peak and lost some momentum.
Market participants now look to next week’s Jackson Hole Symposium, a gathering of major central bank leaders, for clues from Fed Chair Jerome Powell regarding the expected pace of recovery and the timeline for policy tightening.
“We’ll see a mix of opinions, but the focus will be on the Delta variant, the economy, the supply chain and global events,” Ghriskey added. “There’s definitely concern about the Delta variant and the potential timeline of the economic recovery.”
The rose 231.2 points, or 0.66%, to 35,125.32, the S&P 500 gained 33.31 points, or 0.76%, to 4,439.11 and the added 154.35 points, or 1.06%, to 14,696.14.
All 11 major sectors in the S&P 500 were green, with tech stocks and utilities enjoying the largest percentage gains.
Second-quarter reporting season has essentially run its course, with 476 of the companies in the S&P 500 having posted results. Of those, 87.4% have beaten consensus, according to Refinitiv data.
Farm and construction equipment manufacturer Deere (NYSE:) & Co beat quarterly profit expectations and raised its full year guidance due to robust demand. Still, its shares dipped 2.1%.
Bristol-Myers Squibb (NYSE:) advanced about 1% after the U.S. Food and Drug Administration approved the drugmaker’s cancer drug Opdivo.
U.S.-listed shares of China-based tech-related companies oscillated as market participants digested recent sell-offs resulting from Beijing’s ongoing regulatory crackdown, which has wiped half a trillion dollars from Chinese markets this week.
Alibaba (NYSE:) Holding Group was last off about 1.5%, while Tencent Music Entertainment Group (NYSE:), Didi Global and iQiyi Inc advanced between 1% and 5%.
Advancing issues outnumbered declining ones on the NYSE by a 2.36-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favored advancers.
The S&P 500 posted 44 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 169 new lows.
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