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Wall Street Opens Mostly Higher as Yellen Comments Still Weigh; Dow up 28 Pts

Stock MarketsMay 05, 2021 09:47AM ET
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© Reuters.

By Geoffrey Smith

Investing.com – U.S. stock markets opened mostly higher on Wednesday, the market turning positive after initially struggling to shake off the comments by Treasury Secretary Janet Yellen that had spooked it on Tuesday.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 28 points, or less than 0.1%, at 34,161 points, while the S&P 500 was up 0,2%. The Nasdaq Composite was outperforming with a gain of 0.7%.

The Nasdaq had had had its worst day since March after Yellen said it may be necessary to raise interest rates (at some unspecified point in time) to stop the economy overheating. She subsequently walked back her comments as “not a recommendation”. Paul Donovan, chief economist with UBS Global Wealth Management, said in a morning note that the comments were "stating the blatantly obvious."

Chicago Federal Reserve President Charles Evans repeated that he expects policy to stay on hold for "some time" yet, although his reasons were not the ones usually trotted out by senior Fed officials. 

"Our employment mandate is within sight," Reuters reported Evans as saying in remarks prepared for delivery to the Hyman P. Minsky Conference. But with a projected rise in inflation in coming months likely to be short-lived, "achieving our inflation goal may prove more difficult," he said.

Economic data continue to paint a picture of a strengthening recovery, meanwhile. Payrolls processor ADP said an estimated 742,000 people found nonfarm jobs in the private sector in the month through April, the most since September. The figures were slightly below expectations, when adjusted for an upward revision to the previous month’s number.

The auto sector led the way in early trade, as General Motors (NYSE:GM) and Stellantis (NYSE:STLA), the holding company that incorporates Fiat Chrysler and the Peugeot (OTC:PUGOY) and Citroen brands,. both rising after reporting stronger-than-expected results for the first quarter. Both companies were able to ride a rebound in demand, while the shortage of chips that has hit production in recent months also served to keep supply tight and margins firm.

GM stock rose 3.3% in early trade, while Stellantis stock rose 5.3%. Component supplier BorgWarner (NYSE:BWA) stock also rose 3.6% on well-received results.

Among the losers were Peloton Interactive  (NASDAQ:PTON), which fell 6.8% to its lowest since September after issuing a recall for all its treadmills due to safety concerns, after initially trying to brazen out reports of injuries and a death. 

Facebook (NASDAQ:FB) stock also inched lower by 0.3% after its oversight board upheld the social network giant's ban on Donald Trump.  Twitter (NYSE:TWTR), for whom Trump's presence on its network was proportionately more important as a driver of traffic, fell 1.3% to its lowest since February.

Wall Street Opens Mostly Higher as Yellen Comments Still Weigh; Dow up 28 Pts
 

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Comments (6)
Todd Gray
Todd Gray May 05, 2021 12:16PM ET
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rates have to normalize asap. do you know how many home buyers are buying the most overvalued homes in history. the repos will be very bad. the feds buying those home bonds. when people lose their homes and equity, the taxpayers, you and I, have to pay for all the gov losses. it's Clinton home bubble V2. except commercial property is in the mix this time.
Tyrone Jackson
Tyrone Jackson May 05, 2021 11:52AM ET
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If Yellen is speaking, she is lying. It’s that simple. Example: yesterday. How this woman has a job is inconceivable.
CHAD TENDIES
CHAD TENDIES May 05, 2021 11:30AM ET
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SPY PE RATIO: 43.34 LOL
Amine Fourali
Amine Fourali May 05, 2021 10:40AM ET
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For once she said the truth
Mitchel Pioneer
Mitchel Pioneer May 05, 2021 10:33AM ET
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Look at those breakers firing off at the break-even point for the NASDAQ.  Can't let it go red.  How flagrant can it get.  It's no wonder why the global investment community considers the US market the laughingstock of the financial world.
gary leibowitz
gary leibowitz May 05, 2021 10:08AM ET
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WH demanding FED raise rates to prevent over heating when election time comes. Prior AG Barr just got spanked by the Federal Judge declaring he LIED about the DIOJ findings in Mueller report. Liz Cheney being slaughtered by her party for telling the truth. Buffett now says the market is not over valued despite his long standing indicators at extremes NEVER seen before. DOGECOIN a parody site has been endorsed by billionaires and valued in the billions.  BLM shows stark reality of discriminations from videos. States push back to restrict them from assembly and if they block traffic can be legally run over. Voter suppression out in open and Jim Crow laws of the 50's look tame in comparison. What a world!
 
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