By Devik Jain
(Reuters) -The S&P 500 and the Nasdaq indexes scaled record highs on Wednesday on gains in chipmakers and financials, ahead of the Federal Reserve’s highly anticipated annual symposium.
Financials rose 1.7% and were the top gaining S&P sector, followed by energy, industrials and materials. The wider banking index jumped 2.3%, tracking a rise in U.S. Treasury yields. [US/]
Economy-sensitive stocks also got a boost after the U.S. House of Representatives approved a $3.5 trillion budget framework and agreed to vote by Sept. 27 on a $1 trillion Senate-passed infrastructure bill.
U.S. stocks have whipsawed this month as hopes of a vaccine-driven economic recovery clashed against the possibility of a taper tantrum by the Fed amid higher inflation, labor market recovery and a nationwide spike in COVID-19 cases.
The Fed’s economic symposium at Jackson Hole later this week will be closely watched for cues on when the central bank will start tapering its massive asset purchases program. Fed chair Jerome Powell will speak on Friday.
“While we don’t expect anything, the market is vulnerable to either some sort of talk about tapering or some sort of interpretation of his remarks about tapering,” said Julian Emanuel, chief equity and derivatives strategist at BTIG.
“It’s a very fluid push and pull between the risks of the virus intensifying, given that there are certain assumptions about how the economy is going to unfold over the balance of the year and inflation which we believe it may not be as transitory as it believes it to be.”
A Reuters poll of strategists suggests the S&P 500 will end 2021 at 4,500 points, essentially unchanged from its current level, as a stellar recovery in corporate earnings loses momentum.
Profits at U.S. firms are estimated to decline 7.2% in the third quarter after rising 12.4% in the second quarter, data showed, due to supply chain issues and increased labor costs.
At 12:24 p.m. ET, the Dow Jones Industrial Average was up 129.20 points, or 0.37%, at 35,495.46, the S&P 500 was up 13.77 points, or 0.31%, at 4,500.00, and the Nasdaq Composite was up 13.12 points, or 0.09%, at 15,032.92
Semiconductor firms Nvidia Corp and Applied Materials and mega-cap growth stocks Google-owner Alphabet Inc, Tesla Inc and Facebook Inc gained between 0.2% and 2.3%, providing the biggest boost to the Nasdaq.
Among other stocks, Nordstrom Inc tumbled 16% after the department store operator posted a 6% decline in quarterly revenue from pre-pandemic levels and flagged supply chain issues and stiff competition.
Dick’s Sporting Goods Inc jumped 15.1% after the sporting goods retailer announced a special dividend and raised its annual sales and profit forecast.
Advancing issues outnumbered decliners by a 1.80-to-1 ratio on the NYSE and by a 1.74-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and 1 new low, while the Nasdaq recorded 111 new highs and 22 new lows.
(Reporting by Devik Jain in Bengaluru; Editing by Sriraj Kalluvila, Saumyadeb Chakrabarty and Aditya Soni)
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