US: Stocks rally on Evergrande assurances, Federal Reserve decision

[NEW YORK] Wall Street stocks advanced Wednesday following reassurances from China's Evergrande over its finances, while the Federal Reserve kept interest rates low, as expected.

The embattled Chinese property titan said it had agreed to a deal with domestic bondholders that should allow it to avoid missing one of its interest payments, somewhat mollifying a major source of market angst this week.

Worries about the fallout from an Evergrande failure had slammed stocks on Monday.

Later, the Fed kept interest rates low, while adding that it may nonetheless "soon" be ready to begin removing stimulus it provided during the pandemic.

The Dow Jones Industrial Average finished up one per cent at 34,258.32.

The broad-based S&P 500 gained one per cent to finish at 4,395.64, while the tech-rich Nasdaq Composite Index also won one per cent to close at 14,896.85.

Art Hogan, chief strategist at National Securities, attributed the rally to the better Evergrande news, saying, "it feels like we've reconciled that Evergrande is not going to be the start of a financial crisis."

Mr Hogan said investors are not especially worried about the building debate in Washington over raising the debt ceiling. Congressional Republican leaders have thus far refused to cooperate with the ruling Democrats to increase the borrowing limit.

Among individual stocks, FedEx plunged 9.1 per cent as it cut its profit forecast due to higher labor costs and expenses tied to global supply chain upheaval.

Facebook also had a bad day, shedding four per cent as it warned that Apple's iPhone privacy changes, which allow users to block tracking, are significantly hitting its advertising revenues because less data can be collected.

Also on Wednesday, Toast shot up 56.3 per cent in its first session as a public company. The company's cloud-based platforms are used by some 48,000 restaurants.

AFP