Wall Street closed mixed on Wednesday with marginal movement of major indexes. The S&P 500 and the Dow managed to gain following the release of the minutes of the last FOMC meeting in which the Fed reaffirmed its ultra-dovish monetary stance for the time being. However, the Nasdaq Composite ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.1% to close at 33,446.26. Notably, 16 components of the 30-stock blue-chip index ended in the green while 14 in red. The tech-heavy Nasdaq Composite finished at 13,688.84, falling 0.1% despite strong performance by large-cap stocks. Technology giants like Facebook Inc.
FB
and NVIDIA Corp.
NVDA
gained 2.2% and 2%, respectively. NVIDIA carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Meanwhile, the S&P 500 rose 0.2% to end at 4,079.95, marking a fresh closing high. The Communication Services Select Sector SPDR (XLC) gained 0.8% while the Materials Select Sector SPDR (XLB) dropped 1.7%. Notably, five out of eleven sectors of the benchmark index closed in the green while six in red.
The fear-gauge CBOE Volatility Index (VIX) was down 5.3% to 17.16. A total of 9.41 billion shares were traded on Wednesday, lower than the last 20-session average of 12.16 billion. Decliners outnumbered advancers on the NYSE by a 1.38-to-1 ratio. On Nasdaq, a 2.22-to-1 ratio favored declining issues.
Fed to Hold Interest Rates Near Zero Through 2023
On Mar 17, the Federal Reserve reported that it plans to hold its interest rates near-zero through 2023 and sharply ramped up its expectations for economic growth. Despite the improving economic outlook and inflation shooting up the policymaking Federal Open Market Committee (FOMC) will keep rates unchanged and continue the asset purchase program in which the central bank buys at least $120 billion of bonds a month.
Additionally, the central bank raised expectation of GDP growth to a 6.5% annual rate this year and Fed Chairman Jerome Powell emphasized on keeping the dovish policy till the labor market recovers. Existing policy parameters will remain same until the central bank realize its targetted unemployment rate and price stability.
Reopening of the Economy
The U.S. government has accelerated COVID-19 vaccinations. Per CDC vaccine tracker, 32.6% U.S. citizens have already received at least one shot of vaccine. On Apr 6, President Joe Biden announced all American adults will get vaccine by April 19, ahead of an earlier timetable of May 1. The speeding up of the process implies chances of a faster-than-expected reopening of the U.S. economy. This along with the easing of the pandemic will significantly ramp up business activities.
The U.S. economy is witnessing strong recovery since the beginning of 2021 buoyed by $900 billion of the second-round of fiscal stimulus and a fresh round of a massive $1.9 trillion relief package approved by the Biden administration. Furthermore, an estimated $1.5 – $1.8 trillion savings by Americans also supported strong pent-up demand.
Moreover, on Mar 31, President Joe Biden unveiled his $2.3 trillion infrastructure development plan that includes transport, drinking-water, broadband, manufacturing and construction infrastructure developments. These positives have boosted market participants’ confidence.
Stocks That Have Made Headline
Ryanair Expects Slow EU Vaccine Rollout to Hit Traffic
Ryanair Holdings plc
RYAAY
anticipates its fiscal 2022 (ended Mar 31, 2022) traffic to be hit by adversities arising from the European Union’s slow vaccine rollout. (
Read More
)
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