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S&P 500, Nasdaq nab all-time closing highs as Powell soothes taper fears

Stock MarketsAug 27, 2021 09:53PM ET
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© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

By Stephen Culp

NEW YORK (Reuters) - Wall Street rallied on Friday, pushing the S&P and the Nasdaq to record closing highs for the fourth time this week, as U.S. Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole Symposium calmed fears over the tapering timetable and sent investors into the weekend in a buying mood.

All three indexes posted weekly gains.

"I see two things happening," said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. "I see a reflexive dip-buying validation and I see the market embracing a dovish Fed."

Regarding the indexes' recent string of all-time highs, including the S&P 500's 52nd record high close so far this year, Zigmont said "The march north has been very consistent. The drawdowns are super shallow, and the recoveries are very fast."

In his prepared remarks, Powell stopped short of providing a clearer picture regarding the timing of the central bank's tapering of asset purchases or hiking interest rates, the key elements of its dovish monetary policy aimed at helping the economy recover from the pandemic recession.

Indeed, Powell appeared to strike a more dovish tone than other Federal Open Market Committee (FOMC) officials, including St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, who said earlier in the day that they expect the tapering process to begin soon and wind down next year.

"The market is very happy that the Fed is pumping more liquidity into the economy every month," Zigmont added. "The Fed is enabling asset prices to climb and the market is pleased with that."

Economic data released on Friday delivered, in large part, precisely what economists expected - a pullback in consumer spending and sentiment due to the COVID-19 Delta variant, and signs that the current wave of price spikes will not morph into long term inflation, inline with Fed assurances.

The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.

Ten of the 11 major sectors of the S&P 500 advanced, with energy shares enjoying the largest percentage gain.

Chipmaker Nvidia (NASDAQ:NVDA)'s shares rose 2.6% after sources said it would likely seek antitrust approval from the European Union to take over British chip designer Arm.

Workday (NASDAQ:WDAY) Inc jumped 9.1% as brokerages upped their price targets after the company beat second-quarter revenue estimates.

Stay-at-home darling Peloton Interactive (NASDAQ:PTON) Inc slid 8.5% following its profit warning and its announcement it was being probed by U.S. regulators over an accident involving the safety of its treadmills.

Beijing continued its crackdown on its tech companies, threatening to curb their ability to list on U.S. exchanges.

U.S.-listed shares of Alibaba (NYSE:BABA) Group and Tencent Music Entertainment fell 3.5% and 1.4%, respectively, while the Invesco Golden Dragon ETF dropped 1.1%.

Advancing issues outnumbered declining ones on the NYSE by a 5.21-to-1 ratio; on Nasdaq, a 3.40-to-1 ratio favored advancers.

The S&P 500 posted 60 new 52-week highs and one new low; the Nasdaq Composite recorded 132 new highs and 37 new lows.

Volume on U.S. exchanges was 8.67 billion shares, compared with the 8.95 billion average over the last 20 trading days.

S&P 500, Nasdaq nab all-time closing highs as Powell soothes taper fears
 

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Comments (27)
Raj Sinha
Raj Sinha Aug 28, 2021 2:27AM ET
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It is high time changing the meaning of transient in the dictionary.
Darrell Peterson
Darrell Peterson Aug 28, 2021 1:57AM ET
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Sad , many dead from Afghanistan ********bombing , rising Covid rates, eviction moritorium
Darrell Peterson
Darrell Peterson Aug 28, 2021 1:36AM ET
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Most everyone has it wrong , Presidents , Congress , Parliments etc.... are damn near meaningless figure heads . The true rulers of the World are the likes of Powell , Draghi , Abe , and their ilk , created by Bankers for Bankers .
Kevin Avila
Kevin Avila Aug 27, 2021 10:47PM ET
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Watch what happens when unemployment and the housing moritorium end…
JAMES CUNHA
JAMES CUNHA Aug 27, 2021 10:08PM ET
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The Fed Chair revealed one thing today that I suspected... the Fed was not tapering because it benefited the hedge funds and institutional investors on Wall Street. The Fed Chair pretty much had to acknowledge today that tapering the Fed's asset purchases would begin toward the end of the year. Presently, the asset purchases by the Fed are keeping short term lending rates low. Why is this important, hedge funds and institutional investors have a portion of their portfolio leveraged at low cost. Frankly, the public should not have to endure higher inflation so that these hedge fund managers and institutional investors can accumulate additional wealth. This is outrageous.
elliot trach
elliot trach Aug 27, 2021 8:39PM ET
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If you guys are economists, that's one thing, if investors that's another. Sounds like people who missed out on a 12 yr bull market. Or in the past year. What to complain? Just bet against it.
Dave Jones
Dave Jones Aug 27, 2021 4:31PM ET
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I wonder if the people in charge of old joe realise that the rest of the world can see he's not really the president and if a bunch o billhillies can defeat the most powerful advanced military force on earth then America is done for....
Og Smart
Og Smart Aug 27, 2021 4:31PM ET
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Stan Smith
Stan Smith Aug 27, 2021 2:13PM ET
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Every decade or so--1999-2000, 2007-2008, and now 2020-2021--Wall Street's roving army of shills spews the same paper-thin justifications for "this is not a bubble": this rally is just getting started, we're assured because: 1) corporate profits are rising and will support much higher valuations; 2) the Federal Reserve will never let any bubble pop (said in so many words) and 3) if we look at comparative charts of quatloos, the British pound in the 1820s, the current price of sake on the Sendai Exchange and bat guano futures, it's obvious the S&P 500 is still undervalued. (Use as many arcane charts as possible to wow the bag holders.) :-D
Stan Smith
Stan Smith Aug 27, 2021 2:10PM ET
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Welcome Bag holders: The post-bubble-crash phase is already being prepared: 'no one could have seen this coming' - except anyone who paid attention to anything other than self-interested shills.
Jouni Matero
Jouni Aug 27, 2021 1:25PM ET
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Chairman of Fraud Economy Doomed leaves his legacy by ruining the US economy for years to come.
Frank Francone
Frank Francone Aug 27, 2021 1:25PM ET
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He is creating the biggest bubble in history. And he continue on every speech. Insane
Ross Dre
Ross Dre Aug 27, 2021 1:20PM ET
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I always appreciate most comments here. Investing.com users seem to mostly have the score on how irrational and unhealthy our fed has made the US markets. There’s good reason the rule is be fearful when others are greedy and vice versa.
perplexed76 .
perplexed76 . Aug 27, 2021 12:55PM ET
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give money straight to real producers. Every time he patient all kind of financial parasites get excited.
St Af
St Af Aug 27, 2021 12:53PM ET
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Just last week alone Fed printed $ 99 billions. IT'S AN INSIDE JOB....Have FAITH !
Mitchel Pioneer
Mitchel Pioneer Aug 27, 2021 12:42PM ET
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New record levels of fraud in the US Ponzi Scheme, greatest financial fraud in history, and biggest investment JOKE in the world.
New World Order
New World Order Aug 27, 2021 12:42PM ET
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Printer Powell, not Prudent Powell
Lib Can
Lib Can Aug 27, 2021 12:38PM ET
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American workers will end up with a lot of bills in their pockets, but they will be able to buy very little
Ominous Owl
Ominous Owl Aug 27, 2021 12:38PM ET
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'Nurse' hahahahahaha
Mart Mala
Mart Mala Aug 27, 2021 12:31PM ET
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Powell not looking at starting tapering some point without increasing interest rates calmed down everything . Almost every investor is going into the weekend without much stress
Parekh Kar
Parekh Kar Aug 27, 2021 12:31PM ET
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deep red is coming , not too far now
Cave Man
Cave Man Aug 27, 2021 12:27PM ET
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The major US indexes will turn to red today... ;)
Cave Man
Cave Man Aug 27, 2021 12:27PM ET
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Impossible to end this week with green candle.
Rajat Sharma
Rajat Sharma Aug 27, 2021 12:16PM ET
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This will start withdrawal from EMs over the next 4 months.
Rajat Sharma
Rajat Sharma Aug 27, 2021 12:15PM ET
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this will start withdrawal from EMs over the next 4 months
Joel Bennett
Joel Bennett Aug 27, 2021 12:13PM ET
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If the fed is going to continually create these "waves," then just learn to ride the waves. Sometime next week someone will say something negative and the market will fall for two days...... BUY! Then all of that will be reversed in a few more days and the market will make up those losses and then some..... SELL! It's all a bunch of hooey anyway. Might as well make some money.
Ronald Warren
Ronald Warren Aug 27, 2021 12:13PM ET
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They set us up in that pattern before the crash last year. One of these times, the market won't stop going down. Be careful not to sell your puts too soon!
Parekh Kar
Parekh Kar Aug 27, 2021 12:03PM ET
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big downside is about to start, market operators are making fool of everyone
Mark Jannetty
Mark Jannetty Aug 27, 2021 11:53AM ET
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as if he can do anything else, without causing a recession.
Me comment
Me comment Aug 27, 2021 10:32AM ET
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The analyst make wild unsubstantiated predictions so they can profit on the markey moves they cause. Sounds a lot like how trump operated, only looking out for himself.
 
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