Dow, S&P 500, Nasdaq poised to extend post-Fed swing higher – MarketWatch

December 16, 2021 by No Comments

U.S. stocks headed modestly higher on Thursday, extending the rally that was seen after a Federal Reserve policy decision on Wednesday and putting the S&P 500 index within range of a record high close.

Investors, meanwhile, were digesting a raft of U.S. economic data against the backdrop of monetary-policy moves by the Federal Reserve on Wednesday and the Bank of England and European Central Bank on Thursday.

What’s happening
  • The Dow Jones Industrial Average
    162 points, or 0.5%, to 36,084.

  • The S&P 500
    added 0.4%, or about 17 points, to 4,727, above a record closing level at 4,712.02 put in on Dec. 10.

  • The Nasdaq Composite Index
    gained 0.3%, or 45 points, to 15,609.

On Wednesday, the Dow rose 383 points, or 1.08%, to 35927, the S&P 500 increased 76 points, or 1.63%, to 4710, and the Nasdaq Composite gained 328 points, or 2.15%, to 15566.

What’s driving markets

Central banks remained in the frame on Wall Street, a day after the Federal Reserve adopted a hawkish stance in its forecasts for interest-rate hikes in 2022 and 2023 while also more aggressively slowing the pace of its bond buying.

The Bank of England on Thursday made a surprising decision for a second month in a row, opting to lift interest rates, and in an 8-to-1 vote increased its benchmark rate to 0.25% from 0.10%. The U.K. government’s worries about the economic impact of the omicron variant of coronavirus, as well as central bank policy makers’ speeches ahead of time, had led traders to expect the BOE would refrain from raising rates in December.

Meanwhile, the European Central Bank, also on Thursday, said it would further slow purchases of assets under its Pandemic Emergency Purchase Program, or PEPP, in the first quarter of next year and bring them to a halt in March. But the ECB left interest rates unchanged.

“The Governing Council judges that the progress on economic recovery and towards its medium-term inflation target permits a step-by-step reduction in the pace of its asset purchases over the coming quarters. But monetary accommodation is still needed for inflation to stabilize at the 2% inflation target over the medium term,” the ECB said in a statement.

“Based on asset price moves during the meeting and after, fear ahead of the FOMC meeting was probably even more exaggerated than we thought,” said Steve Englander, head of global G10 currency research and North America macro strategy at Standard Chartered.




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