(Feb 24): U.S. stocks reversed losses after reassuring comments from Federal Reserve Chairman Jerome Powell on inflation and the outlook for growth spurred traders to buy the dip. Treasuries edged higher and Asian equities look set for a mixed start.
Stocks Rally as Powell Soothes Traders’ Nerves: Markets Wrap
Bloomberg 2/24/2021 Lu Wang and Kamaron Leach
(Bloomberg) U.S. equities reversed losses and staged a rally as Federal Reserve Chairman Jerome Powell reaffirmed his view that the economy needs support. Government bond yields climbed along with oil prices.
Energy and industrial companies led gains in the S&P 500 Index, offsetting weakness for tech stocks. Banks advanced, sending an industry gauge to its highest since 2007, and small caps rallied more than 2% after U.S. regulators said Johnson & Johnson’s Covid-19 vaccine is safe and effective. Tesla Inc. gained after Ark Investment Management’s Cathie Wood said she bought shares during this week’s selloff. U.S. 10-year yields touched 1.43%, the highest since February 2020, before paring the increase.
U.S. equities reversed losses and staged a rally as Federal Reserve Chairman Jerome Powell reaffirmed his view that the economy needs support. Government bond yields climbed along with oil prices.
The benchmark stock gauge closed 0.1% higher after declining as much as 1.8% amid a rout in technology shares on concern the high-flying stocks had become overvalued. The Nasdaq 100 ended just slightly lower, mostly erasing a loss that reached 3.5% after Powell signaled the Federal Reserve was nowhere close to pulling back on its support for the economy. Airlines, lodging companies and cyclical shares set to benefit from the end of pandemic lockdowns outperformed.
So-called growth shares are having their worst month against value counterparts in more than two decades as vaccination campaigns gather pace and bond yields hover near a one-year high. Bets on faster growth have pushed the gap between 5- and 30-year yields to the highest level in more than six years.
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