The S&P 500 ended little changed on Wednesday, and the TSX posted modest gains, after Federal Reserve Chair Jerome Powell said the central bank was still a ways away from considering raising interest rates.
Keeping the market in check, shares of tech giant Apple Inc fell 1.2% after it forecast slowing revenue growth.
In a news conference following the release of a new policy statement from the Fed, Powell also said the U.S. job market still had “some ground to cover” before it would be time to pull back from the economic support the U.S. central bank put in place in the spring of 2020 to battle the coronavirus pandemic’s economic shocks.
“It looks like probably the most positive thing for the market was that they are nowhere near increasing interest rates,” said Alan Lancz, president, Alan B. Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio.
The S&P 500 index reversed slight declines following the Fed’s statement, while the Dow pared losses and the Nasdaq added to its gains. U.S. Treasury yields fell.
The Fed also kept its overnight benchmark interest rate near zero and left unchanged its bond-buying program.
In its statement that came at the conclusion of its latest two-day policy meeting, the central bank also said that higher inflation remained the result of “transitory factors.”
The Nasdaq ended higher and shares of Google parent Alphabet Inc hit an all-time high as a surge in advertising spending helped it post record quarterly results. The stock ended up 3.2%.
The Dow Jones Industrial Average fell 127.59 points, or 0.36%, to 34,930.93, the S&P 500 lost 0.82 point, or 0.02%, to 4,400.64 and the Nasdaq Composite added 102.01 points, or 0.7%, to 14,762.58.
The Fed’s statement came at the conclusion of its latest two-day policy meeting.
“They had a chance to signal they were going to become more hawkish and they chose not to take it. The most important thing is they are predictable and they are remaining predictable,” said Ellen Hazen, portfolio manager at F.L. Putnam Investment Management in Wellesley, Massachusetts.
In other U.S. earnings news, Microsoft Corp ended down 0.1% even as a boom in cloud services helped it beat Wall Street expectations for revenue and earnings.
The S&P/TSX Composite index closed at 20,230.40, a gain of 57.05 points, or 0.28% - and about 70 points shy of its all-time record high close. Pot stocks rallied after Tilray, in its first quarter since merging with Aphria, reported revenues that rose 25 per cent from a year earlier and indicated improved results lie ahead once economies more fully reopen. Tilray soared 25% and Canopy Growth and Aurora Cannabis both rose more than 6%.
The materials sector was also a strong performer for the TSX, gaining 1.3%, even as gold prices held steady near US$1,800 an ounce. Shopify fell 0.6% in a lacklustre reaction to the company’s latest earnings report.
Canadian Pacific Railway reported results after the close that were inline with market expectations and US. shares were nearly unchanged in the post market.
Benchmark 10-year yields fell to 1.228%, after briefly rising to a session high of 1.278% immediately after the Fed statement.
Volume on U.S. exchanges was 9.86 billion shares, compared with a similar average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.85-to-1 ratio; on Nasdaq, a 2.61-to-1 ratio favored advancers. The S&P 500 posted 42 new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 67 new lows.
Reuters, with files from Darcy Keith of The Globe and Mail
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