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Indexes close higher as investors assess Fed news

Economy25 minutes ago (Sep 23, 2021 03:46PM ET)

(C) Reuters. FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

By Caroline Valetkevitch

(Reuters) – U.S. stocks jumped more than 1% on Thursday as investors appeared relieved about the Federal Reserve’s stance on tapering stimulus and raising interest rates.

Upbeat outlooks from Accenture (NYSE:ACN) and Salesforce (NYSE:CRM) helped to bolster the market, while the U.S. Food and Drug Administration late Wednesday authorized a booster dose of the Pfizer-BioNTech COVID-19 vaccine for those 65 and older.

Also helping sentiment, concern about contagion from China Evergrande continued to ease.

The Fed said on Wednesday it could begin reducing its monthly bond purchases by as soon as November, and that interest rates could rise quicker than expected by next year. The November deadline was largely priced in by markets.

In a press conference after the statement, Fed Chair Jerome Powell said the bar for lifting rates from zero is much higher than for tapering.

“This is a follow-on rally from a very good Fed meeting,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“To me that showed there were no surprises and things were as expected,” he said. “Any Fed rate hike is still quite a ways off and so much can change between now and then.”

Energy and financial stocks were among the best sector performers.

The Dow Jones Industrial Average rose 564.2 points, or 1.65%, to 34,822.52, the S&P 500 gained 61.87 points, or 1.41%, to 4,457.51 and the Nasdaq Composite added 168.88 points, or 1.13%, to 15,065.73.

Shares of IT services provider Salesforce jumped 7.3%, and the company was a big boost to the S&P and the Dow after it raised its annual earnings forecast.

Accenture added 2.6% after the IT consulting firm boosted its first-quarter outlook.

Concerns eased further over a potential default by Chinese property developer Evergrande even as Reuters reported that some holders of the firm’s dollar bonds had given up hope of getting a coupon payment by a key Thursday deadline.

Investors shrugged off data showing sluggish business activity growth and a rise in jobless claims, in line with expectations for a slowdown in economic growth in the third quarter.

The S&P 500 broke above its 50-day moving average, after trading below the indicator for three sessions – its biggest such breach since early March.

Advancing issues outnumbered declining ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 2.66-to-1 ratio favored advancers.

The S&P 500 posted 26 new 52-week highs and three new lows; the Nasdaq Composite recorded 93 new highs and 44 new lows.

Indexes climb 1% as investors assess Fed news

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