S&P 500 Hangs On Modest Gain As Other Indices End Mixed

Wall Street closed a wobbly trading day on Wednesday with a mixed finish for major stock indexes, as tech and communications companies weighed in on the market for a second day in a row.

The Standard & Poor’s 500 Index rose 0.2% after losing most of a 0.8% gain. The modest gain came a day after the benchmark posted its worst decline since May. The index is on the cusp of its first monthly loss since January.

The Dow Jones industrial average also lost momentum as the day went on, but managed to gain 0.3%, while the high-tech Nasdaq composite fell 0.2% after rising 0.9 % in the beginning.

Bond yields have stabilized after surging last week and weighing on the market, especially technology stocks. The higher yields have forced investors to reevaluate if the prices have been too high for stocks, as this makes them expensive in comparison.

The broader market lost ground in September, leaving the S&P 500 down 3.6% for the month with a day to go. Investors spent much of the month examining a mixed batch of economic data that showed the effects of COVID-19 and the highly contagious Delta variant on consumer spending and the labor market recovery.

Wall Street is still trying to gauge how far the lingering rise in inflation will be as the economy goes through and eventually recovers from the pandemic. The Fed has said higher inflation will likely be temporary and tied to the economic recovery, but more companies have signaled they expect higher costs to persist. Bond yields started rising last week after the central bank signaled it may start taking action in the coming months to cut some of the support it has provided to the economy throughout. the pandemic.

“Today, it’s a kind of tug-of-war between which the greatest concern is: is it inflation or rates? Said Randy Frederick, vice president of commerce and derivatives at Charles Schwab. “Today’s action tells me we don’t know.”

The S&P 500 gained 6.83 points to 4,359.46. The Dow Jones gained 90.73 points, finishing at 34,390.72, while the Nasdaq fell 34.24 points to 14,512.44. The Russell 2000 Small Business Index also fell, dropping 4.47 points, or 0.2%, to close at 2,225.31.

The yield on the 10-year Treasury, which is used to set interest rates on many types of loans, held steady at 1.53%.

Healthcare companies and a mix of consumer-focused companies accounted for a significant portion of the S&P 500’s gains. Eli Lilly was up 4% and Procter & Gamble added 1%.

Investors are still watching the Federal Reserve closely to assess how slowing economic growth will affect the speed of its plan to eventually cut bond purchases it has made to help keep interest rates low.

Wall Street also has its eye on Washington, where Democrats and Republicans in Congress are fighting to extend the nation’s debt limit. If the limit, which caps the amount of money the federal government can borrow, is not raised by Oct. 18, the country “would likely face a financial crisis and economic recession,” said Wednesday. Secretary of the Treasury Janet L. Yellen in Congress.

Yellen’s remarks came a day after Senate Republicans blocked consideration of a bill that would have raised the debt ceiling.

The stalemate is starting to worry Wall Street, Frederick said.

“I expect the market to become more volatile and possibly decline depending on how close we get to that deadline,” he said.

Wall Street is also gearing up for the next round of corporate earnings in the coming weeks. Investors will get a more detailed look at how supply chain issues and higher costs are affecting business finances.

A wide range of companies have warned investors about the effect of inflation on costs and profits. Nike, Costco and FedEx were among those who cited material costs, shipping delays, and labor issues.

Sherwin-Williams has become the latest company to warn that higher raw material costs will hurt profits. The stock gained 0.8% as investors took the announcement on the heels, but it is still down 9.6% from its all-time high of $ 308.70 on September 2.

Asian markets mostly fell while European markets rose.

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