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Wall Street steady before Fed; tech stocks under pressure

Kitco News

(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-related stocks weighed on the Nasdaq.

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 Nasdaq briefly turned negative before regaining lost ground, while the S&P 500 technology subindex was flat by midday trading. Eight of the 11 S&P sectors gained in early trading.

Apple Inc, Inc, Facebook Inc and Microsoft Corp fell between 0.5% and 1.3%, leading to the biggest drags on the tech-heavy index.

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.

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.

“The Fed has made abundantly clear that policy rates will remain pinned near zero for as far as the eye can see,” said Seema Shah, chief strategist at Principal Global Investors.

“Yet, markets will be impatient for additional guidance on how they will utilize their broader toolkit if they want inflation to hit 2% over the forecast horizon, let alone overshoot it.”

At 11:33 a.m. ET the Dow Jones Industrial Average was up 219.71 points, or 0.78%, at 28,215.31, the S&P 500 was up 19.50 points, or 0.57%, at 3,420.70 and the Nasdaq Composite was up 26.60 points, or 0.24%, at 11,216.92.

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 jumped 6.4% after reporting a bigger-than-expected quarterly profit, helped in part by price hikes and lower fuel costs. Shares in rival United Parcel Service Inc gained 0.2%.

Both stocks were among top performers on the Dow Jones Transports index, which rose 1.3%. The index is often seen as a barometer of economic health.

Spotify Technology SA slipped 3.4% after the streaming music firm criticized Apple Inc, saying that a new subscription bundle offer from the iPhone maker abuses its dominant market position by favoring its own Apple Music service.

Eastman Kodak Co jumped 33.9% 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 3.37-to-1 ratio on the NYSE and a 2.69-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and no new low, while the Nasdaq recorded 62 new highs and 10 new lows.

Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Shounak Dasgupta

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