Dow snaps 4-day losing streak amid optimism from Fed meeting

American flags are seen on Wall Street outside the New York Stock Exchange in New York City. The Dow continued losses on Friday after a major stock sell-off that began Thursday. File Photo by John Angelillo/UPI

Sept. 22 (UPI) — The Dow Jones Industrial Average gained 338 points on Wednesday to snap a four-day losing streak as markets reacted to the Federal Reserve committing to keep its pandemic monetary policies in place.

The blue-chip index closed the day up 1%, while the S&P 500 gained 0.9% and the Nasdaq Composite rose 1.02% following the news from the closing of the Federal Open Market Committee’s two-day meeting.

In response to the COVID-19 pandemic the central bank has been purchasing $120 billion a month of Treasurys and mortgage-backed securities and in its post-meeting statement the Fed said “a moderation in the pace of asset purchases may soon be warranted” but did not set a specific date.

“While a taper announcement, maybe, is coming in November, that they didn’t do so today just reflects a still uber dovish committee,” Peter Boockvar, chief investment officer at Bleakley Advisory Group said, according to CNBC.

The committee also voted unanimously to keep short-term interest rates at 0% to 0.25%, the same level since March 2020, although the Fed hinted at a potential interest rate hike in 2022.

Wednesday’s news had little impact on bond yield with the 2-year treasury yield rising above 0.24% and the 10-year rate falling below 1.3% to a session low following the meeting before ultimately rising back up to 1.33%.

Commodity-related stocks bounced back on Wednesday as investors saw concerns about Chinese property developer Evergrande’s debt crisis ease.

APA stock grew 7.19%, Devon Energy gained 6.84%, Diamondback energy rose 5.42% and Marathon Oil climbed 5.35%.

Wednesday’s gains came as the three major indexes have struggled in September with the Dow down 3% on the month, while the S&P has fallen 2.8%.


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