Off The Wire
S&P 500, Dow rise before Fed; tech stocks pull down Nasdaq
(Reuters) - The S&P 500 and Dow Jones indexes rose on Wednesday on hopes that the Federal Reserve would continue to keep interest rates low for a prolonged period, while a slide in tech stocks dragged the Nasdaq lower.
The central bank’s two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.
The Federal Open Market Committee will release its policy statement and economic projections at 2 p.m. ET (1800 GMT), followed by Fed Chair Jerome Powell’s virtual news briefing half an hour later.
“They have a very loose monetary policy right now and we expect that to continue ... the Federal Reserve is the stock market’s best friend,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland.
The Fed will also be releasing its “dot plot” projection of interest rates, which is a chart of dots representing the anonymous, individual rate projections of Fed policymakers for the next few years.
The Nasdaq flitted between gains and losses in choppy afternoon trading, while the S&P 500 technology subindex fell 0.6%.
Apple Inc, Amazon.com Inc, Facebook Inc and Microsoft Corp fell between 0.6% and 2%, accounting for the biggest drags on the tech-heavy index.
“The large cap tech stocks obviously have done great especially in the face of a pandemic. Now they’re taking a breather,” Grisanti said.
Wall Street’s main indexes attempted a comeback from a tech-driven slump earlier in the month that saw the Nasdaq Composite index slip into correction territory in just three sessions.
At 12:54 p.m. ET the Dow Jones Industrial Average was up 194.15 points, or 0.69%, at 28,189.75, the S&P 500 was up 8.42 points, or 0.25%, at 3,409.62 and the Nasdaq Composite was down 32.32 points, or 0.29%, at 11,158.00.
Mixed data has also kept investors on edge about the pace of an economic recovery as latest figures showed U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining.
Delivery firm FedEx Corp rose 6.1% after reporting a bigger-than-expected quarterly profit, helped in part by price hikes and lower fuel costs.
FedEx gained the most on the Dow Jones Transports index, which rose 1.2%. The index is often seen as a barometer of economic health.
Spotify Technology SA fell 1.5% after Apple Inc announced a bundled plan for all its services that lowered the cost of Apple Music subscriptions.
Eastman Kodak Co jumped 37% after a law firm hired by the photography equipment maker said its chief executive officer’s securities transactions around the time the company learned it could receive a $765 million government loan did not violate internal policies.
Advancing issues outnumbered decliners for a 3.13-to-1 ratio on the NYSE and a 2.53-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and no new low, while the Nasdaq recorded 67 new highs and 10 new lows.
Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Shounak Dasgupta