US Markets End Higher After Fed Statement, Stocks Trim Losses

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Summary

• S&P 500 rose 0.29%, Dow Jones was up 0.58%, and NASDAQ gained 0.40%.
• Federal Reserve reaffirms to keep easy-monetary policies until economy regains strength.
• American Airlines Group secures $10 billion loan to pay-off its government debts.

US stocks edged higher on Wednesday after the Federal Reserve highlighted the growth momentum in the economy and kept the interest rates steady, and tech, consumer cyclicals, and energy scrips recouped losses.

The S&P 500 rose 0.29% to 3974.12. The Dow Jones Industrial Average was up 0.58% to 33015.37. The NASDAQ Composite Index gained 0.40% to 13525.20, and the small-cap Russell 2000 rose 0.73% to 2336.39.

The Federal Reserve reaffirmed on Wednesday to maintain an easy-monetary policy until the US economy regains more strength from the effects of the pandemic. The central bank in its meeting also highlighted the steady improvement in the economy while deciding to keep the rates intact. 

Stocks of basic materials, healthcare, financials, consumer non-cyclicals, and consumer cyclical sectors that are generally dependent on the performance of the economy have seen an uptick in the recent sessions. Tech stocks, on the other hand, continued their descent amid a variety of worries.

The chip shortage, which was initially reported early this year, continues to be a major concern for the consumer-electronics sector. Smartphones, PCs, and television makers continue to face steep challenges as they struggle to maintain production. The twin blow of the pandemic and the severe cold weather conditions have been blamed for the widespread supply chain disruptions.

According to the latest data of the US Bureau of Labor Statistic, the prices of raw materials, such as lumber, bricks, concrete blocks, granite, and insulation materials, as well as crude oil futures have soared to new highs in recent weeks, making home-building an expensive affair. For instance, the price gain of crude oil, which is used in making paints, has also increased the prices of emulsions.

The American Airlines Group has said that it secured a $10-billion fund to pay-off its government debts. Its total obligations now stand at around US$50 billion. The move will help keep the company running even as it will look for new opportunities in a reviving economy, post covid limitations. The company now joins others that escaped a likely bankruptcy during the pandemic by borrowing.

Meanwhile, the Biden administration has firmed up plans to allocate US$10 billion for covid testing in schools. The funding is part of the US$1.9 trillion sanctioned by the president for covid relief.

In Wednesday’s session, consumer cyclicals, basic materials, industrials, energy, financials, technology, consumer non-cyclical stocks closed higher after paring losses, while healthcare, real estate, and utilities pulled back.

Pic Credit: Pixabay.

Also read: Why Are Tech Stocks In North America Sinking?

Top Gainers

Top performers on S&P 500 included Lennar Corp (13.80%0, General Motors Co (5.13%), Expedia Group Inc (5.04%), and D.R. Horton Inc (4.48%). On NASDAQ, top performers were Integrated Media Technology Ltd (79.87%), Oriental Culture Holding Ltd (76.96%), Liquid Media Group Ltd (62.55%), and Zhongchao Inc (46.15%). On Dow Jones, Dow Inc (4.48%), Boeing Co (3.28%), Caterpillar Inc (3.17%), and Mcdonald's Corp (1.93%) were among the leaders.

Top Losers

Top laggards on S&P 500 included NRG Energy Inc (-16.71%), Abbvie Inc (-5.23%), ViacomCBS Inc (-4.05%), and AES Corp (-3.73%). On NASDAQ, Rubius Therapeutics Inc (-24.42%), Chemomab Therapeutics Ltd (-21.05%), Summer Infant Inc (-16.56%), and CHF Solutions Inc (-16.03%) were the losers. On Dow Jones, Walgreens Boots Alliance Inc (-1.12%), Walmart Inc (-0.83%), Visa Inc (-0.75%), and Home Depot Inc (-0.73%) were among the laggards.

Image Source: Refinitiv, S&P 500 1-Year price chart, March 17, 2021.

Volume Movers

Top volume movers included Apple Inc (24.18mn), Plug Power Inc (23.36mn), Sundial Growers Inc (21.09mn), Zhongchao Inc (18.61mn), Oriental Culture Holding Ltd (16.01mn), Tonix Pharmaceuticals Holding Corp (15.97mn), Intel Corp (12.31mn), Microsoft Corp (10.95mn), American Resources (10.56mn), ViacomCBS Inc (10.32mn), Ford Motor Co (19.45mn), General Electric Co (11.34mn), and Microsoft Corp (10.95mn).

Futures & Commodities

Gold futures were up 0.76% to $1,744.10 per ounce, silver prices rose 1.55% to $26.407 per ounce, and copper was up 1.81% to $4.1452.

Brent oil futures were up 0.01% to $67.85 and WTI crude dropped 0.57% to $64.43 per barrel.

Bond Market

The 30-year treasury bond yields were up 1.20% to 2.420, while the 10-year bond yields gained 1.43% to 1.646.

US Dollar Futures Index was down 0.53% to 91.395.

Also read: Volkswagen Stocks Rise After ‘Power Day’ Event & EV Move

In another significant announcement, the International Energy Agency (IEA) said on Wednesday that gasoline demand has peaked and unlikely to return to the pre-pandemic levels due to the increased environmental concerns that shifted the governments’ focus towards EVs and renewables.

Additionally, the growing efficiency of fossil fuel-powered vehicles will far outweigh the demand from the developing world, it noted. The energy watchdog’s five-year forecast also shows that the number of the world’s electric vehicles will rise to 60 million by 2026, up from 7.2 million in 2019.