Thu, 28 Oct 2021

U.S. stocks rise after Fed announcement

23 Sep 2021, 07:18 GMT+10

NEW YORK, Sept. 22 (Xinhua) -- U.S. stocks finished higher on Wednesday even as the Federal Reserve indicated it may begin tapering asset purchases soon.

The Dow Jones Industrial Average increased 338.48 points, or 1.00 percent, to 34,258.32. The S&P 500 rose 41.45 points, or 0.95 percent, to 4,395.64. The Nasdaq Composite Index was up 150.45 points, or 1.02 percent, to 14,896.85.

Nine of the 11 primary S&P 500 sectors ended in green, with energy up 3.17 percent, outpacing the rest. The utilities and the communication services groups, however, struggled.

U.S.-listed Chinese companies traded higher with all the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on an upbeat note.

Investors remained focused on the Fed as the U.S. central bank on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero, while signaling that it may begin tapering asset purchases soon despite the Delta variant increasing economic uncertainty.

The Fed has pledged to continue its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until "substantial further progress" has been made on employment and inflation since last December.

"Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Federal Open Market Committee (FOMC), the Fed's policy-making committee, said in a statement after a two-day meeting.

"The tiptoe toward taper continues. The new language suggests the Fed expects to announce taper at one of the remaining two meetings this year unless something drastic gets in the way," Chris Low, chief economist at FHN Financial, said in a note.

At a virtual press conference Wednesday afternoon, Fed Chair Jerome Powell said that the sectors most adversely affected by the pandemic improved in recent months, but the rise in COVID-19 cases slowed recovery.

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