US stocks end with records as Powell signals no rush to end stimulus
(AFP)
NEW YORK – Wall Street ended the week with new records after Fed Chair Jerome Powell signaled the central bank could slow its stimulus by the end of the year but is in no rush to raise rates.
The broad-based S&P 500 advanced 0.9 percent to close at 4,509.37 — its first close over the 4,500 mark — and the tech-rich Nasdaq Composite Index jumped 1.2 percent to 15,129.50. Both had retreated on Thursday after multiple records.
The benchmark Dow Jones Industrial Average gained 0.7 percent to end at 35,455.80.
The Federal Reserve’s stimulus has helped push equities steadily higher in recent months, and in his highly anticipated speech to the annual Jackson Hole central banking symposium, Powell highlighted the Fed’s focus on waiting for the labor market to improve further.
While rising infections from the Delta variant of Covid-19 remain a risk, the Fed chief said the economy should continue to improve and policymakers could start the process of tapering its massive bond purchases by the end of the year.
But the comments at the Jackson Hole central banking symposium did not provide any specifics on the timetable.
Kim Forrest at Bokeh Capital Partners said the focus on “fixing employment ahead of inflation” means “tapering is moved to a further-off place than investors had anticipated.”
Government data released Friday showed a key inflation gauge rose 4.2 percent annually in July, but Powell warned it would be harmful to make an “ill-timed” policy move to respond to temporary price pressures that already appear to be receding.
In individual stocks, interactive exercise equipment maker Peloton dropped 8.6 percent after reporting lackluster quarterly results.
But clothing retailer Gap rose 0.6 percent after a positive earnings report.
