By Caitlin McCabe and Will Horner
The S&P 500 eked out a record close Wednesday after notes
from the Federal Reserve's last policy meeting showed that the
central bank remains committed to supporting markets and the
The broad benchmark index rose 6.01 points, or 0.1%, to 4079.95,
notching its 18th record close of the year. The Dow Jones
Industrial Average also rose, gaining 16.02 points, or less than
0.1%, to 33446.26.
The technology-heavy Nasdaq Composite, meanwhile, edged down,
falling 9.54 points, or 0.1%, to 13688.84.
The record high for the S&P 500 came after an otherwise
anticlimactic day for the U.S. stock market, as major indexes
teetered between small gains and losses throughout most of the
session. With no clear catalyst to drive markets higher, coupled
with below-average trading volumes, stocks largely struggled to
Still, the S&P 500 and the Dow managed to end the day in the
green after the Fed released its minutes from its March meeting in
the afternoon. The document showed that Fed officials believe that
current guidance for the federal-funds rate and asset purchases was
"serving the economy well, " according to the minutes. The central
bank has held interest rates near zero and has continued to
purchase $120 billion of Treasury bonds and mortgage-backed
Investors and analysts weren't expecting major new
pronouncements in the document, especially as Fed officials have
continued to publicly reiterate that the central bank is committed
to providing support for as long as it takes. Still, some remained
on the lookout for hints "around future expectations," said JJ
Kinahan, chief market strategist at TD Ameritrade, as well as
whether opinions "are starting to splinter within the group."
The minutes showed that central bankers noted "it would likely
be some time until substantial further progress toward the
Committee's maximum-employment and price-stability goals would be
Most officials also didn't see an outsize risk of inflation
becoming an issue, the document showed.
Concerns about inflation have rattled markets this year, as
investors have worried that continued economic growth, coupled with
government spending, could prompt the Fed to pull back on its
support of the economy and markets earlier than expected.
"I think what most people are thinking about is later this year,
when we start to get not just one month of really strong
employment, but months upon months of strong gains," said Keith
Lerner, chief market strategist for Truist Advisory Services.
Signs of economic growth have proved to be a double-edged sword
for markets lately. Despite fears that an overheated economy could
eventually lead to tightening of monetary policy, investors have
simultaneously cheered data that has shown that recovery from the
Covid-19 pandemic is under way. On Monday, enthusiasm over the
March jobs report, which showed that U.S. employers added a
seasonally adjusted 916,000 jobs, propelled the S&P 500 and the
Dow to fresh records.
In general, the stock market has kicked off the second quarter
on a high note, and the rally has widened. About 94% of companies
in the S&P 500 are now trading above their 200-day moving
average, according to Dow Jones Market Data as of Wednesday's
Signs of that market breadth were evident Wednesday, with stocks
ranging from Amazon.com to Carnival to Hess all gaining 1.4% or
more. Other winners for the day included L Brands, which jumped
$2.25, or 3.6%, to $64.29 after UBS upgraded the stock from neutral
to buy. Twitter also jumped $1.99, or 3%, to $68.99.
"We had been expecting the data to improve about this time, and
early signals are that the recovery is absolutely on track," said
Hugh Gimber, global market strategist at J.P. Morgan Asset
Management. "This is the period where the forecast of a strong
recovery in growth is starting to look more like the fact of a
strong recovery in growth."
U.S. stock investors have been encouraged lately by signs of
stabilization in the government-bond market, as bond yields have
ticked down after climbing sharply from the start of the year. The
yield on the benchmark 10-year U.S. Treasury note fell Wednesday to
1.653%, from 1.656% on Tuesday, notching a third consecutive day of
The recent slip in yields has provided some respite for
technology stocks, which had come under pressure from the higher
borrowing costs. But many investors continue to bet that it will be
the economically sensitive sectors such as banks and energy that
stand to benefit most from a reopening.
In commodity markets, Brent crude, the international oil
benchmark, gained 0.7% to close at $63.16 a barrel.
Overseas, the pan-continental Stoxx Europe 600 gauge ticked down
In Asia, most major stock indexes were mixed. Japan's Nikkei 225
edged 0.1% higher, while Hong Kong's Hang Seng fell 0.9%. In
mainland China, the Shanghai Composite Index dropped 0.1%.
Write to Caitlin McCabe at email@example.com and Will
Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
April 07, 2021 17:24 ET (21:24 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.