S&P 500 Inches Ahead to Fresh Record
By Caitlin McCabe and Will Horner
U.S. stocks wobbled Wednesday after notes from the Federal
Reserve's last policy meeting showed that central bank officials
reaffirmed their commitment to supporting the markets and the
The S&P 500 edged up 0.1% to 4079.78 a fresh record. The
technology-heavy Nasdaq Composite slipped 0.1%. The Dow Jones
Industrial Average wobbled between gains and losses, recently
gaining 16 points, less than 0.1%.
All three major indexes teetered throughout most of Wednesday
ahead of the Fed's minutes release, as investors awaited clues
about how officials were thinking about inflation expectations and
the recent rise in government-bond yields. After the Fed's minutes
release at 2 p.m. ET, indexes found direction and briefly turned
higher before beginning to waver again.
Investors and analysts weren't expecting big surprises from the
document, especially as Fed officials have reiterated that the
central bank is committed to providing support for as long as it
Still, some remained on the lookout for hints "around future
expectations," said JJ Kinahan, chief market strategist at TD
Ameritrade, as well as whether some bankers "are starting to
splinter within the group."
Investors have been closely watching for clues from the central
bank in recent months as concerns about inflation have swelled.
Some have worried that continued economic growth, coupled with
government spending, could prompt the Fed to pull back on its
support of the economy and markets earlier than expected.
In the minutes, officials expressed that current guidance for
the federal-funds rate and asset purchases was "serving the economy
well," the document showed. The central bank has held interest
rates near zero and has continued to purchase at least $120 billion
of Treasury bonds and mortgage-backed securities monthly. The
minutes showed that central bankers noted that "it would likely be
some time until substantial further progress toward the Committee's
maximum-employment and price-stability goals would be
Signs of economic growth have proved to be a double-edged sword
for markets lately. Despite fears that an overheated economy could
eventually lead to tightening of monetary policy, investors have
simultaneously cheered data that has shown that recovery from the
Covid-19 pandemic is under way. On Monday, enthusiasm over the
strong March jobs report propelled the S&P 500 and the Dow to
In general, markets have kicked off the second quarter on a high
note, helping widen the stock market's rally. Nearly 95% of
companies in the S&P 500 are now trading above their 200-day
moving average, according to Dow Jones Market Data, the highest
figure since May 2013.
On Wednesday alone, stocks ranging from Amazon.com to Carnival
to Hess all gained 2.2% or more.
"We had been expecting the data to improve about this time, and
early signals are that the recovery is absolutely on track," said
Hugh Gimber, global market strategist at J.P. Morgan Asset
Management. "This is the period where the forecast of a strong
recovery in growth is starting to look more like the fact of a
strong recovery in growth."
U.S. stock investors have been encouraged lately by signs of
stabilization in the government-bond market, as bond yields have
ticked down after climbing sharply from the start of the year. The
yield on the benchmark 10-year U.S. Treasury note fell on Wednesday
to 1.652%, from 1.656% on Tuesday.
The recent slip in yields has provided some respite for
technology stocks, which had come under pressure from the higher
borrowing costs. But many investors continue to bet that it will be
the economically sensitive sectors such as banks and energy that
stand to benefit most from a reopening.
"The value play is still very much on the table as the economy
expands," said Mr. Walsh. "For the last 10 years, everything was
about growth stocks, and now we are seeing a changing of the
In commodity markets, Brent crude, the international oil
benchmark, gained 0.7% to close at $63.16 a barrel.
Overseas, the pan-continental Stoxx Europe 600 gauge ticked down
In Asia, most major stock indexes were mixed. Japan's Nikkei 225
edged 0.1% higher, while Hong Kong's Hang Seng fell 0.9%. In
mainland China, the Shanghai Composite Index dropped 0.1%.
Write to Caitlin McCabe at firstname.lastname@example.org and Will
Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
April 07, 2021 16:19 ET (20:19 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.