MW Nasdaq Composite looks to add to record rally, as S&P 500, Dow struggle for momentum
By William Watts and Mark DeCambre
U.S. stock benchmarks drifted higher Wednesday morning, with the Nasdaq Composite aiming to post a 16th straight record in 2021 and the S&P 500 index struggling to surpass last week's record closing gains in the aftermath of the Federal Reserve's policy updates.
The blue-chip Dow, however, was facing some slights headwinds from declines in UnitedHealth Group Inc. $(UNH)$and 3M Co.$(MMM)$, compared against gains in Goldman Sachs Group Inc. $(GS)$ and Boeing Co. $(BA)$
What are major benchmarks doing?
On Tuesday , stocks pushed higher, with the Nasdaq Composite closing at a record, while the Dow added 68.61 points, or 0.2%, and the S&P 500 rose 0.5%, leaving it 0.2% away from its all-time high finish of 4255.15 on June 14.
What's driving the market?
Stocks are bouncing after taking a hit last week when the Federal Reserve said that policy makers expect to begin raising interest rates more quickly than investors had anticipated and had started to discuss when it would be appropriate to consider scaling back monthly bond purchases.
However, investors were reassured Tuesday when Fed Chairman Jerome Powell testified before a House committee , repeating that the central bank expects rising inflationary pressures to prove transitory. Powell's tone was echoed by other Fed officials speaking Tuesday.
"Investors deciphered all this as implying the Fed won't slam on the brakes too hard and will hold the market's hand throughout the normalization process, which helped propel the rate-sensitive Nasdaq to new record highs as tech and growth stocks came back in vogue," said Marios Hadjikyriacos, investment analyst at XM, in a note.
On the U.S. economic calendar, a reading of the U.S. current-account deficit climbed 11.7% to $195.7 billion in the first three months of 2021.
Meanwhile, IHS Markit U.S. flash manufacturing purchasing managers index rose to 62.6 in June from 62.1 in May, while the U.S. flash services PMI fell to 64.8 in June from 70.4 in the prior month. The flash U.S. Composite PMI Output Index posted 63.9 in June, down from 68.7 in May , but nonetheless signalled a historically elevated rate of expansion in output across the private sector.
Moderations in activity growth were seen in both the manufacturingand service sectors, with goods producers hampered in particular by significant supplier delays and both sectors reporting difficulties finding staff, Chris Williamson, Chief Business Economist at IHS Markit, said.
Earlier Wednesday IHS Markit reported its flash eurozone composite PMI increased from 57.1 in May to 59.2 in June, its highest since June 2006, indicating a third successive month of accelerating output growth as the economy continued to open up from COVID-19 related restrictions.
U.S. May new-home sales figures are scheduled for 10 a.m. They're forecast to slow to an annualized pace of 859,000 from 863,000 in April.
Investors will also hear from Boston Fed President Eric Rosengren, who is delivering remarks at an event at 4:30 p.m.
-William Watts; 415-439-6400; AskNewswires@dowjones.com
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$(END)$ Dow Jones Newswires
June 23, 2021 10:02 ET (14:02 GMT)
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