US STOCKS-Wall Street closes higher as worries ease around Fed and Russia default

Wall Street’s three major indexes rose more than 1% on Thursday as investors scrutinized the Federal Reserve’s trajectory for interest rate hikes and concerns eased over the prospects of a default. from Russia after creditors have received payments.

Investors were reassured that Russia may, at least for now, have avoided what would have been its first external bond default in a century. Indeed, creditors have received payment, in dollars, for coupons on Russian bonds that matured this week, two market sources told Reuters on Thursday. The S&P 500, Dow Jones Industrial Average and Nasdaq posted their biggest 3-session percentage gain since early November 2020 after reports boosted risk appetite in a market already benefiting from bargain hunting. . The S&P 500 also had its third consecutive day of growth of more than 1%.

The Fed raised interest rates by a quarter of a percentage point on Wednesday as expected and laid out an aggressive plan for further hikes while policymakers also cut economic growth projections for the year. According to Michael James, managing director of equity trading at Wedbush Securities, Russian payout news and the breaking of “upside” technical decline lines in indices, including the S&P and Nasdaq, all boosted stocks. .

“It gives investors an increased level of cautious optimism, which is a change from the significant pessimism we’ve seen since early January,” James said. “People are more comfortable with the fact that rates are going up. Chairman (Jerome) Powell has been talking about it nauseously since early December,” he said. “The fact that there were no significant negative surprises in the Fed’s plans coming out of the meeting, and Powell’s comment, gave people the feeling that we may have seen too bad that there will be any in the short term.”

Describing the Fed’s plans as dovish, Phil Blancato, CEO of Ladenburg Thalmann Asset Management in New York, also said continued peace talks between Russia and Ukraine had helped the mood. “What you see today just as a ripple effect from yesterday,” Blancato said. “There is a potential conflict resolution overseas, the positive effects of the Federal Reserve and actions at a very fair entry point, providing an opportunity to add risk.”

The Dow Jones Industrial Average rose 417.66 points, or 1.23%, to 34,480.76, the S&P 500 gained 53.81 points, or 1.23%, to 4,411.67 and the Nasdaq Composite added 178.23 points, or 1.33%, to 13,614.78. The energy sector was the biggest percentage gainer among the S&P’s 11 major industrial sectors, ending up 3.5% as oil prices rose 8% as the crude market rebounded after several days of losses with renewed focus on supply shortages in the coming weeks due to sanctions on Russia.

The sector’s laggards were more of the more defensive industries, with utilities adding just 0.5% and consumer staples, which rose 0.6%. The S&P Index of Interest Rate Sensitive Banks ended the session up slightly after falling 2% earlier in the session and rising 3.7% on Wednesday. The US Treasury yield curve rebounded, after hitting its flattest level in more than two years.

Russian and Ukrainian officials met again on Thursday for peace talks, but said their positions were far apart. Earlier Thursday, data showed weekly jobless claims fell last week as demand for labor remained strong, positioning the economy for another month of strong job gains.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 4.10 to 1; on the Nasdaq, a ratio of 2.93 to 1 favored advancers. The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 46 new highs and 53 new lows.

On US exchanges, 12.88 billion shares changed hands compared to the 20-day moving average of 14.18 billion.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

Garland K. Long