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S&P, Nasdaq post record closes on dovish Fed taper-talk

Stock MarketsAug 30, 2021 08:00PM ET
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© Reuters. FILE PHOTO: The floor of the the New York Stock Exchange (NYSE) is seen after the close of trading in New York, U.S., March 18, 2020. REUTERS/Lucas Jackson/File Photo

By David French

(Reuters) - The S&P 500 and Nasdaq topped their record closes once again on Monday, bolstered by technology stocks, as last week's dovish comments from the Federal Reserve on tapering its monetary stimulus refocused investors' minds on economic growth.

It was the fourth record closing high in five sessions for the S&P, and the fifth in six sessions for the Nasdaq, runs only interrupted by jitters ahead of Fed Chair Jerome Powell's Jackson Hole speech.

Ultimately, these worries were unfounded as Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemic-era stimulus, while reaffirming a steady economic recovery.

"It's now clear that there's going to still be an extraordinary amount of support for this economy, probably until November," said Ed Moya, senior market analyst for the Americas at OANDA.

"Some investors are thinking that tapering might not even start this year, but the one thing that everyone can agree on is that Chair Powell has signaled they are in no rush to raise interest rates and he's disconnected tapering with rate-hike timing."

With this in mind, investors turned to high-growth tech stocks which tend to benefit from expectations of lower rates because their value rests heavily on future earnings.

Apple Inc (NASDAQ:AAPL) jumped 3% to an all-time high, while Microsoft Corp (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Google-owner Alphabet (NASDAQ:GOOGL) Inc rose between 0.4% and 2.1%, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.

The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging COVID-19 cases.

The S&P 500 has risen 3% so far in August - a seasonally weak period for stocks - and Wells Fargo (NYSE:WFC) analysts said last week they expect the index to rise another 8% by the end of the year.

It is also on track to log one of its best year-to-date returns through August of the past six decades, said Chris Larkin, managing director of trading at E*Trade Financial (NASDAQ:ETFC).

The S&P 500 gained 19.42 points, or 0.43%, to 4,528.79 and the Nasdaq Composite added 136.39 points, or 0.9%, to 15,265.89. The Dow Jones Industrial Average fell 55.96 points, or 0.16%, to 35,399.84,

While U.S. crude prices rose 0.7% on Monday, energy stocks broadly slipped as investors fretted about possible longer-term impacts from Hurricane Ida, which roared ashore on Sunday near Port Fourchon, Louisiana, a major hub for the U.S. offshore oil industry. [O/R]

The energy index fell 1.2%, with only the financials benchmark dropping further on the day, as bank stocks reacted to falling bond yields.

PayPal Holdings Inc (NASDAQ:PYPL) advanced 3.6% on a CNBC report that the financial services firm was exploring the development of a stocks trading platform for its U.S. customers. The news helped send Robinhood Markets Inc (NASDAQ:HOOD) down 6.9%.

Volume on U.S. exchanges was 8.77 billion shares, compared with the 8.95 billion average for the full session over the last 20 trading days.

The S&P 500 posted 77 new 52-week highs and no new lows; the Nasdaq Composite recorded 153 new highs and 34 new lows.

S&P, Nasdaq post record closes on dovish Fed taper-talk
 

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Comments (20)
Juniper Ls
Juniper Ls Aug 30, 2021 8:36PM ET
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Powell, Carlyle Group, and Blackrock https://www.counterpunch.org/2020/05/22/the-feds-chair-and-vice-chair-got-rich-at-carlyle-group-a-private-equity-fund-with-a-string-of-bankruptcies-and-job-losses/
Millennial Metals
Millennial Metals Aug 30, 2021 4:23PM ET
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I like a strong stock market and all…but come on this is just dangerous. We all have 401ks and benefit from this (for now) but long term we are done for
Shane Weddle
Shane Weddle Aug 30, 2021 4:23PM ET
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Yeah 401k ate a joke too because you cant control your nest egg. Dont get me wrong they are great for tax planning but otherwise not much good.
Anthony Crowley
Anthony Crowley Aug 30, 2021 3:53PM ET
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Former Vice Chair Don Kohn and Jeremy Grantham don't appear to be fooled by Powell's smoke screen. Take a read of Kohn's speech as JHole.  He says in the most gentlemanly way he can that the Fed has created an unsustainable situation  “The current situation is replete with…unusually large risks of the unexpected, which, if they come to pass, could result in the financial system amplifying shocks, putting the economy at risk.”  Grantham went further to argue the Fed should “act to deflate all asset prices as carefully as [it can], knowing that an earlier decline, however painful, would be smaller and less dangerous than waiting.”  These two old dogs are not fooled.  Unfortunately it seems Powell doesn't believe in icebergs anymore.
Mitchel Pioneer
Mitchel Pioneer Aug 30, 2021 3:05PM ET
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The most grossly overvalued stock market index in history, NASDAQ, is pumped again, while the DOW miraculously rises out of the red "in late trade."  No profit taking, just record after record close, as the US Ponzi Scheme financially dismantles the US middle class in broad daylight.  Assume the proper position America.
Black Beard
Black Beard Aug 30, 2021 3:05PM ET
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that's why they had the BLM protests. To divert the anger away from the government & have people fight each other instead.
jake goldstein
jake goldstein Aug 30, 2021 2:57PM ET
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It's so easy to win.I say buy everyday since 2010 and they all ignore me.I have 7.9M in my bank account going long.There are so many dummies on here. I tell them RSI Overbought in the tech market is a massive buy. I always win.I buy the retail dummies sell. It's fun. All they need to know is the market is rigged by government the fed and wall street. All all retail brokers sell their clients positions so the alogs can stop them out or force a close loss position on margin. It's criminal fraud to the moon but no one goes to jail and the billionaires head towards trillionaires of cheating and fraud.
Saint Dabow
Saint Dabow Aug 30, 2021 2:57PM ET
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Loser
Ransom Smith
Ransom Smith Aug 30, 2021 2:57PM ET
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I think you are right my friend.
Tim Gilbert
TimothyTekno2020 Aug 30, 2021 2:57PM ET
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You had me until you went into your conspiracy theory. And buying when RSI is over 80 is bad idea as price always falls back with patience.
Ross Dre
Ross Dre Aug 30, 2021 2:57PM ET
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Tim Gilbert he had me til he started bragging about his gains and how great he is.
Larry DeAngelis
Larry DeAngelis Aug 30, 2021 2:57PM ET
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A speculator who dies with money dies before his time!
wally spaller
wally spaller Aug 30, 2021 2:50PM ET
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Up 12,000 Just another day.
Ricardo Diogo
Rcd72 Aug 30, 2021 2:41PM ET
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i wonder when will someone ask in what did asset purchases helped real economy or employment ?the fed program only drove raw materials and energy to artificial insane Ath prices..
Jokers R Us
Jokers R Us Aug 30, 2021 2:35PM ET
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Amazing how this 🤡 fan fool the markets on a dime. So much power he doesn’t even need to act, just talk. Amazing.
Ronald Warren
Ronald Warren Aug 30, 2021 1:58PM ET
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If Powell was half as smart as he thinks he is, he would have announced tapering, so the market could let off some steam and correct a little. Nobody should be buying right now. These elevated levels are insane!
Jani Fält
Jani Fält Aug 30, 2021 1:58PM ET
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so you should sell now
Ronald Warren
Ronald Warren Aug 30, 2021 1:58PM ET
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I'm holding with stop loss in place.
Dave Jones
Dave Jones Aug 30, 2021 1:44PM ET
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economic boom led by free money. the fed money printer is the bedrock of the economy
Casino Crypt
CasinoCrypt Aug 30, 2021 1:40PM ET
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We are in middle of pandemic. Fires and drought raging across half the globe. Prices ramping everywhere pumped by hidden inflation. Brexit bottlenecks, hurricanes, huge geo political tensions in South China sea.   Lebanon without a government ...   But Wall Street party marches on and higher oblivious to it all. You cant make this stuff up if you tried.
David Thapa
David Thapa Aug 30, 2021 1:21PM ET
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Stan Smith
Stan Smith Aug 30, 2021 12:20PM ET
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Inflation...forgotten, Tapering forgotten, Rate increases forgotten. If you're good at forgetting and ignoring  stocks will always go up. :-)
Casino Crypt
CasinoCrypt Aug 30, 2021 12:20PM ET
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Stocks don't need hard data any more . Its all about the biggest headline news . 20 years ago, under the circumstances, this economic environment would have sunk the markets to the sea bed.
JONAS BEZOS
JONAS BEZOS Aug 30, 2021 11:54AM ET
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USA is truly drop to 0 trust, they just ading new debt and call that great working economy
Neel Bhagat
Neel Bhagat Aug 30, 2021 11:54AM ET
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they will ruin small investors that's sure.
Theo Ross
Theo Ross Aug 30, 2021 11:54AM ET
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Debt is not a problem. The global economy is based on debts. You can even have debts used to pay debts, that's not a problem either.
Stan Smith
Stan Smith Aug 30, 2021 11:54AM ET
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Theo Ross Debt isn't a problem? Honestly, what planet are you from?
Tim Gilbert
TimothyTekno2020 Aug 30, 2021 11:54AM ET
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Stan Smith Debt is not a problem in itself. I dont know about you, but i had substantial student loan debt for my MBA, debt to buy my cars so i can go years later without any car payment, mortgage debt to buy my duplex thats nearly tripled in value in 11 years, and low interest revolving debt to buy everything from a new bathroom for tenants and major appliances to large car maintenance bills or airfare. Companies use low interest debt to expand operations, and sovereign debt is used to manange the ups and downs in tax revenue from economic cycle to stumulate when folks lose their jobs or income or to fund infrastructure or military needs.Excessive debt and high interest debts are a problem, particularly if cash flow becomes a problem, but debt has been used for millenia to foster opportunities and economic growth and is a fundamental necessity of capitalism and free markets.
Theo Ross
Theo Ross Aug 30, 2021 11:49AM ET
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Okay, so here I am again Microsoft. Every time, it looks like this company is the best investment...
Michael Angelo
Michael Angelo Aug 30, 2021 11:37AM ET
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Powell new aka Katrina's. 🙈🙉
Michael Angelo
Michael Angelo Aug 30, 2021 11:35AM ET
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This is very BOOORING... Looks like cheer-man Powell only job is continuing flooding the system and algos of course happy with it. 🤧
Pezhman Parsi
Pezh Aug 30, 2021 10:07AM ET
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We start the week by + and new records then we continue + few days with new ATHs then we have a small minus day on Thursday and we have all new ATH on Friday and so on to the next week.. Its been the norm for a long time.
Pezhman Parsi
Pezh Aug 30, 2021 10:04AM ET
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Pending Home Sales -1.8% vs +0.4%, Bad news are great news, ATH today again
jake goldstein
jake goldstein Aug 30, 2021 10:04AM ET
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Yes bad news is always good for stocks especially tech.The good news is the ordinary working job has debt at still near record levels and the rich have become even richer. The system works just fine and the politicians(and their hedge fund,banker buddies) have mad billions off insider trading (which is allowed on capitol hill. The working man is is suffering more than ever pays the billions to the rich. So pop the champagne corks on The Hamptons because the rich have never had it so good!
Mitchel Pioneer
Mitchel Pioneer Aug 30, 2021 9:35AM ET
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The criminally manipulated joke called the US Ponzi Scheme goes on to new records, as the legalized financial defiling continues.
Jokers R Us
Jokers R Us Aug 30, 2021 9:35AM ET
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All countries have central banks btw, doing the same thing. Ours is just at a larger scale since we have the largest gdp and are the worlds reserve currency.
 
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