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S&P ends higher after Powell calms the market
Federal Reserve Chair Jerome Powell told a congressional hearing Wednesday that monetary policy will offer “powerful support” to the economy, and his reassuring words sent the S&P 500 to an intra-day record. Focusing on the need for continued job gains, he indicated it’ll be a while before the central bank begins to reduce its monthly bond purchases that stimulate the economy. “While reaching the standard of substantial further progress is still a ways off, participants expected progress will continue and we will continue these discussions in coming meetings.” Powell’s comments followed data this week showing wholesale prices rising more than expected and consumer prices increasing by the most in 13 years. The Dow and the S&P inched up a tenth of a percent. But the Nasdaq shed a fifth of a percent. Bank of America, Wells Fargo, and Citigroup posted surging quarterly profits that blew past expectations. But BofA shares shed 1.6% after the lender detailed its sensitivity to low interest rates. Shares of Wells Fargo rose 4%. The lender, which is trying to turn itself around from a sales practices scandal, swung to a profit from a loss. Delta Air Lines reported its first quarterly profit since the start of the health crisis. But it shed its opening gains as travel stocks broadly came under pressure. American Airlines bucked the trend, rising 3% after the carrier forecast positive cash flow.
