Wall Street rally carries on after Fed keep rates ultra-low
NEW YORK — Stocks are holding on to their gains on Wall Street Wednesday after the Federal Reserve said it will keep the accelerator floored on its aid for the economy, and the S&P 500 is on pace for its best day in two weeks.
The benchmark index was 1% higher in afternoon trading, while Treasury yields held steady and gold touched another record high. The Dow Jones Industrial Average was up 97 points, or 0.4%, at 26,479 as of 2:15 p.m. Eastern time, and the Nasdaq composite was up 1.2%.
Stocks climbed from the start of the day’s trading, and carried on rising after the Fed said it will hold interest rates at their record lows. The Fed also said it will also continue buying about $120 billion in Treasury and mortgage bonds each month. That policy is aimed at injecting cash into financial markets and spurring borrowing and spending. A day before, the central bank said it would continue several lending programs through the end of the year to help support the economy.
Such aid, along with stimulus from Congress, helped launch the stock market’s turnaround in March. Congress is also locked in negotiations for more support for the economy, with $600 in weekly unemployment benefits about to expire. Democrats and Republicans seem to remain far apart in their proposals, but investors are still hopeful about a deal’s chances.
It’s also a frenetic week for profit reports from the biggest U.S. companies. Several reported results for the spring that topped Wall Street’s expectations, even though they were far below last year’s levels from before the pandemic. That’s been the general trend so far this earnings season, with 40% of companies in the S&P 500 having reported.
Advanced Micro Devices rose 12.5% for one of the market’s bigger gains after it reported an even stronger jump in profit from April through June than Wall Street expected. It also raised its forecast for revenue through 2020. It’s notable because many companies have been pulling their forecasts or declining to offer any given all the uncertainty in the economy created by the pandemic.
The chip maker helped tech stocks in the S&P 500 rise 1.1% as a group, and they once again led the index higher.
Starbucks gained 3.9% after it reported a loss for the spring that wasn’t as bad as analysts were expecting. It also gave a forecast for the current quarter that envisions a profit, though it gave a wide range with the lower and upper ends bracketing analysts’ expectations.