Wall Street’s bulls cheer after Dow, S&P snap 5-day losing streak

September 14, 2021 - 2 weeks ago
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Wall Street’s stocks swung between modest gains and losses on Tuesday as investors remained cautious as they closely await signs regarding when the U.S. Federal Reserve will begin to pare back easy-money policies implemented during the pandemic.

The central bank has been buying $120 billion in bonds and other assets since the COVID-19 outbreak of March 2020 to support the economy. It has also been keeping interest rates at virtually zero levels for the past 18 months.

However, comments in recent days from U.S. Fed officials have suggested that potential tapering by the central bank meant policymakers thought the U.S. economy was through the worst of the coronavirus crisis.

Patrick Harker, president of the Federal Reserve Bank of Philadelphia, told news sources that “markets are functioning well” and that emergency monetary stimulus “is no longer relevant”, while Loretta Mester, Cleveland Fed chief, said on Friday that the U.S. economy had improved enough for the asset purchases to slow.

The U.S. Fed officials kick off its two-day meeting this month on Sept. 21-22.

Closely-watched inflation data will be released on Tuesday when August’s Consumer Price Index (CPI) is released, which is crucial to the U.S. Federal Reserve’s decision on when the central bank may signal to begin tapering its stimulus and raise interest rates.

At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average booked its strongest performance out of the three U.S. indexes after rising +261.91 points, or +0.8%, to 34,869.63.

Meanwhile, the broad-based Standard & Poor’s 500 Index eked out a +10.15 points, or +0.2% gain to 4,468.73, and the rich-tech Nasdaq Composite Index slid -9.91 points or -0.1% to 15,105.58, for a fourth consecutive down day.

Energy shares were among the strongest performers in the S&P 500 on Monday, rising alongside the oil prices after the Organization of the Petroleum Exporting Countries said it expected global demand to exceed pre-pandemic levels next year.

Stocks linked to the economic reopening – including airlines and cruise line operators — also gained after the seven-day daily U.S. Covid case average declined to around 144,300, down from roughly 167,600 cases per day at the beginning of the month.

In other news, in Washington, House Democrats proposed new tax hikes to pay for the $3.5 trillion spending package.
A summary from the Ways and Means Committee showed that the plan calls for top corporate and individual tax rates of 26.5% and 39.6%, respectively.

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