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.