Reuters
Published Aug 27, 2021 07:12AM ET
Updated Aug 27, 2021 09:53PM ET
By Stephen Culp
NEW YORK (Reuters) - Wall Street rallied on Friday, pushing the S&P and the Nasdaq to record closing highs for the fourth time this week, as U.S. Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole Symposium calmed fears over the tapering timetable and sent investors into the weekend in a buying mood.
All three indexes posted weekly gains.
"I see two things happening," said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. "I see a reflexive dip-buying validation and I see the market embracing a dovish Fed."
Regarding the indexes' recent string of all-time highs, including the S&P 500's 52nd record high close so far this year, Zigmont said "The march north has been very consistent. The drawdowns are super shallow, and the recoveries are very fast."
In his prepared remarks, Powell stopped short of providing a clearer picture regarding the timing of the central bank's tapering of asset purchases or hiking interest rates, the key elements of its dovish monetary policy aimed at helping the economy recover from the pandemic recession.
Indeed, Powell appeared to strike a more dovish tone than other Federal Open Market Committee (FOMC) officials, including St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, who said earlier in the day that they expect the tapering process to begin soon and wind down next year.
"The market is very happy that the Fed is pumping more liquidity into the economy every month," Zigmont added. "The Fed is enabling asset prices to climb and the market is pleased with that."
Economic data released on Friday delivered, in large part, precisely what economists expected - a pullback in consumer spending and sentiment due to the COVID-19 Delta variant, and signs that the current wave of price spikes will not morph into long term inflation, inline with Fed assurances.
The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.
Ten of the 11 major sectors of the S&P 500 advanced, with energy shares enjoying the largest percentage gain.
Chipmaker Nvidia (NASDAQ:NVDA)'s shares rose 2.6% after sources said it would likely seek antitrust approval from the European Union to take over British chip designer Arm.
Workday (NASDAQ:WDAY) Inc jumped 9.1% as brokerages upped their price targets after the company beat second-quarter revenue estimates.
Stay-at-home darling Peloton Interactive (NASDAQ:PTON) Inc slid 8.5% following its profit warning and its announcement it was being probed by U.S. regulators over an accident involving the safety of its treadmills.
Beijing continued its crackdown on its tech companies, threatening to curb their ability to list on U.S. exchanges.
U.S.-listed shares of Alibaba (NYSE:BABA) Group and Tencent Music Entertainment fell 3.5% and 1.4%, respectively, while the Invesco Golden Dragon ETF dropped 1.1%.
Advancing issues outnumbered declining ones on the NYSE by a 5.21-to-1 ratio; on Nasdaq, a 3.40-to-1 ratio favored advancers.
The S&P 500 posted 60 new 52-week highs and one new low; the Nasdaq Composite recorded 132 new highs and 37 new lows.
Volume on U.S. exchanges was 8.67 billion shares, compared with the 8.95 billion average over the last 20 trading days.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.