NEW YORK: Wall Street stocks ended higher on Thursday (March 2) as markets weighed the implications of the US central bank's latest interest rate increase and commentary, following turmoil in the banking sector.
The movements also came after Treasury Secretary Janet Yellen told a House subcommittee hearing that authorities would be “prepared to take additional actions if warranted” to prevent contagion in the financial sector.
The Dow Jones Industrial Average rose 75.14 points, or 0.23%, to 32,105.25, the S&P 500 gained 11.75 points, or 0.30%, to 3,948.72 and the Nasdaq Composite added 117.44 points, or 1.01%, to 11,787.40.
All three major US stock indices reversed an earlier rally, turning red before clawing their way back to positive territory in the final hour as Yellen resumed her congressional testimony.
“You watch this market and you watch it change direction in a short period of time and it’s based on some market participants’ interpretation over what someone said and how it affects how their trading,” said Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta.
“The market as a whole is telling you is there are a lot of different ways to interpret all the things people are saying.”
The bounceback came as traders digested the Federal Reserve’s (Fed) earlier comments, after major indices plunged Wednesday on the central bank's ninth consecutive rate increase.
While it raised the benchmark lending rate by a quarter-point to fight inflation, the Fed had also signaled it was close to ending its hiking cycle.
Fed chair Jerome Powell suggested in a press briefing that the Fed may be able to lift rates less than otherwise planned, as banking sector turmoil had weighed on the economy in a similar way to another rate increase.
The Fed “effectively said that they are going to pause or step back after raising interest rates one more time”, economist Hugh Johnson told AFP.
“That’s a positive signal and it’s the reason why the market has performed reasonably well today,” he added.
Among individual companies, Microsoft picked up around 2% while Apple edged up 0.7%.
But regional lenders continued to feel pressure, with KeyCorp slipping 6.5%, First Republic dropping 6% and PacWest Bancorp falling 8.6%. – AFP, Reuters
Source: The Sun Daily
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