US stocks rise on Wall Street, remain on track for weekly gains
Stocks shook off an early stumble and rose in morning trading on Wall Street on Thursday, keeping the market on track to break a three-week losing streak.
The S and P 500 rose 0.5 per cent as of 10.58 am Eastern. The benchmark index is holding on to a 1.9 per cent gain for the week.
Stocks have been mostly losing ground in recent weeks after the Federal Reserve indicated it will not let up anytime soon on raising interest rates to bring down the highest inflation in decades.
The Dow Jones Industrial Average rose 133 points, or 0.4 per cent, to 31,720 and the Nasdaq rose 0.6 per cent.
Health care stocks made broad gains. Regeneron surged 16.9 per cent after the company and partner Bayer reported encouraging study data on an anti-blindness drug. Banks also rose broadly. JPMorgan Chase rose 2.1 per cent.
Bond yields remained mostly steady. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, fell to 3.25 per cent from 3.27 per cent late on Tuesday.
The two-year Treasury yield, which tends to track expectations for Fed action, rose to 3.47 per cent from 3.44 per cent.
Interest rates policies were in sharp focus for investors as the European Central Bank made its largest-ever rate increase, in line with moves from the Fed and other central banks to fight inflation.
The bank’s 25-member governing council raised its key benchmark by three-quarters of a percentage point on Thursday.
Meanwhile Fed Chair Jerome Powell reaffirmed the Fed’s commitment to keep rates high until the job is done in getting back down to its 2 per cent goal.
There is a record of failed attempts to get inflation under control, which only raises the ultimate costs to society, he said during a conference on monetary policy by the Cato Institute, a think tank that promotes libertarian ideas.
The central bank has already raised rates four times this year and markets expect it to deliver another jumbo-sized increase of three-quarters of a percentage point at its next meeting in two weeks.
One of the Fed’s biggest fears is that households and businesses begin to expect inflation to stay high in the long term, which could lead them to start buying in a way that creates a vicious cycle making inflation even harder to shake.
The Fed has caught criticism for not taking inflation seriously sooner, and Powell said that setting interest-rate policy is an art as much of a science.
A big question remains about whether the high inflation ravaging economies around the world is a one-off created by the pandemic or the start of something more persistent.
Markets in Europe were higher and markets in Asia were mixed. Japan’s benchmark Nikkei 225 surged 2.3 per cent.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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