US: S&P 500, Nasdaq notch all-time closing highs ahead of Fed meeting

[NEW YORK] Wall Street gained ground again on Wednesday, with chipmakers and financials helping to push the S&P 500 and the Nasdaq to record closing highs as investors look to the upcoming Jackson Hole Symposium for assurances that Federal Reserve's timeline for policy tightening remains intact.

With few negative catalysts to sour the risk-on sentiment, all three major US indices ended the session modestly higher.

"Positive news on vaccination approvals, and expectations that the Fed won't shock markets at Jackson Hole, are helping to keep equity prices higher," said David Carter, chief investment officer at Lenox Wealth Advisors in New York, who added "it's a very quiet market as many investors are sitting on the beach this week".

Rising US Treasury yields boosted rate sensitive financials, and sectors that stand to gain most from economic revival - smallcaps, chips and transports - were outperforming the broader market.

Days after the Food and Drug Administration gave full approval to the Pfizer-BioNTech Covid-19 vaccine, companies and institutions are moving toward either mandated inoculation, or penalisation for those who forego the shot.

The Pentagon and Delta Air Lines are the latest to enact such measures, with Ford Motor and others potentially following suit.

The session marked the S&P 500's 51st record high close so far this year.

Analysts polled by Reuters, however, see the stock market staying rangebound for the remainder of 2021, with the S&P 500 ending the year little changed as the pandemic recovery, along with corporate earnings growth, lose steam.

"Following a long run, equity indices have cooled off as the next engine of growth is unclear," Mr Carter added. "Fiscal and monetary stimulus may have lost their oomph to push markets higher still."

Tame economic data, including flat new orders for core capital goods, reinforced the notion that Fed chairman Jerome Powell is unlikely to hint at a shortened timeline for policy tightening at the virtual Jackson Hole Symposium, due to get underway on Friday.

"(The) expectation is that Fed won't scare markets, and will announce only a cautious tapering," Mr Carter said.

The Dow Jones Industrial Average rose 39.24 points or 0.11 per cent to 35,405.5, the S&P 500 gained 9.96 points or 0.22 per cent to 4,496.19 and the Nasdaq Composite added 22.06 points or 0.15 per cent to 15,041.86.

Financials were the clear winners among 11 major sectors in the S&P 500, gaining more than 1 per cent. Healthcare stocks suffered the largest percentage decline.

Chipmakers Nvidia and Applied Materials rose 1.9 per cent and 1.2 per cent, respectively, and along with mega-cap growth stocks Alphabet, Tesla and Facebook, provided the biggest boost to the Nasdaq.

Nordstrom tumbled 17.6 per cent after the department store operator posted a 6 per cent decline in quarterly revenue from pre-pandemic levels.

Dick's Sporting Goods Inc announced a special dividend and raised its annual sales and profit forecast, sending its shares surging 13.3 per cent.

Advancing issues outnumbered declining ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favoured advancers.

The S&P 500 posted 63 new 52-week highs and one new low; the Nasdaq Composite recorded 125 new highs and 33 new lows.

Volume on US exchanges was 8.29 billion shares, compared with the nine billion average over the last 20 trading days.

REUTERS