Tuesday , 24 November 2020

Wall Street climbs on stimulus timing, S&P 500 eyes record

(Reuters) – U.S. stocks rallied on Thursday, boosting the S&P 500 above its record closing high, a day after Federal Reserve Chairman Ben Bernanke reasserted that monetary policy will remain accommodative for some time.

Bernanke said after the market close on Wednesday the U.S. unemployment rate of 7.6 percent overstated the health of the job market. A highly accommodative policy is needed for the foreseeable future,” he said, triggering a rally in equity futures.

After hitting a record high on May 21, the S&P 500 in June posted its first negative month in eight after Bernanke hinted the U.S. central bank could this year begin to wind down a bond buying program partly responsible for the rally in stocks and record low interest rates.

About 85 percent of shares on the New York Stock Exchange were higher on Thursday and all 10 S&P 500 industry sectors advanced, led by gains in materials and technology shares.

“Rather than being hawkish, Bernanke is saying the right thing that the market wants to hear,” said Yu-Dee Chang, chief trader of ACE Investments in McLean, Virginia.

The Dow Jones industrial average .DJI rose 168.93 points or 1.1 percent, to 15,460.59, the S&P 500 .SPX gained 21.71 points or 1.31 percent, to 1,674.33 and the Nasdaq Composite .IXIC added 54.24 points or 1.54 percent, to 3,575.

In late June, the S&P had fallen as much as 5.8 percent from its closing high of 1,669.16. Gains have come on optimism over improving economic data, anticipation of a better-than-expected earnings season and reduced concern about cuts to the Fed’s $85 billion in monthly bond purchases.

Advanced Micro Devices Inc (AMD.N) jumped 10.6 percent to $4.40 and was the S&P 500’s top performer after Bank of America Merrill Lynch upgraded the stock. The PHLX semiconductor index .SOX rose 2.1 percent to its highest in almost six years.

Celgene Corp (CELG.O), up 7 percent to $133.78, was among the top performers for both the S&P 500 and the Nasdaq 100 .NDX after the company said a late-stage trial of a cancer drug met the main goal of improving survival in newly diagnosed blood cancer patients.

Microsoft Corp (MSFT.O) rose 2.7 percent to $35.64 after the company announced a reorganization designed to streamline the software company’s operations.

RadioShack Corp (RSH.N) lost nearly a fifth of its market value after trade publication Debtwire reported the electronics chain is considering hiring a financial adviser to help fix its balance sheet. Shares were recently down 16.6 percent at $2.36.

Earnings reports are expected on Friday from JPMorgan Chase & Co (JPM.N) and Wells Fargo (WFC.N).

Thomson Reuters data show analysts expect S&P 500 companies’ second-quarter earnings to have grown 2.5 percent from a year earlier, with revenue up 1.5 percent.

(Reporting by Alison Griswold and Rodrigo Campos; Editing by Nick Zieminski)

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