By Geoffrey Smith
Investing.com -- U.S. stocks lost momentum Thursday, as tech stocks led the S&P 500 and Nasdaq lower even after comments from the Federal Reserve initially ignited a rally.
Stocks jumped earlier in the day after Fed Chairman Jerome Powell laid out a change in the central bank's approach to policy-making that is likely to rule out any hike in interest rates for some years.
But by 1:00 PM ET (1700 GMT), the Dow Jones Industrial Average was up 78 points, or 0.28%, giving up a gain of more than 250 points in the morning. The S&P 500 was flat and the Nasdaq Composite, after a series of record highs, was down 0.7%.
"“The Committee seeks to achieve inflation that averages 2% over time, and therefore judges that, following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation immediately above 2% for some time,” The Fed said in an accompanying statement.
Analysts welcomed the move, which acknowledges the trouble the Fed has had in getting inflation up to the level that aligns best with its other goal, full employment. However, it now puts an extra onus on the central bank to achieve its goals.
The pandemic was also behind Abbott Laboratories 's (NYSE:ABT) 7.7% rise, after the Food and Drug Administration gave Emergency Use Authorization to its Covid-19 rapid testing kit.
In the premarket session, stocks had barely reacted to data showing that initial jobless claims stayed stuck above 1 million for another week last week, while continuing claims fell less than hoped. The news was somewhat offset by an upward revision to - admittedly historical - second-quarter gross domestic product data. Of more immediate importance was a rise in pending home sales in July to their highest level since 2005, in fresh evidence of the housing boom triggered by the pandemic and the attendant cuts in interest rates.