Wall Street reaps weekly gains amid Fed announcement, economic data

by IANS |

New York, Nov 7 (IANS) US equities advanced for the week as Wall Street parsed the Federal Reserve's tapering announcement and a slew of economic data.


For the week ending Friday, the Dow rose 1.4 per cent, the S&P 500 increased 2 per cent, and the tech-heavy Nasdaq rallied nearly 3.1 per cent, Xinhua news agency reported. The S&P US Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on US exchanges by total market cap, logged a weekly decline of 0.7 per cent.


In a highly anticipated move, the Federal Reserve announced this week that it would begin unwinding, often referred to as "tapering," its monthly bond and mortgage security purchases amid great concerns over elevated inflation levels. "Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors," the Federal Open Market Committee (FOMC), the Fed's policy-making committee, said in a statement after a two-day policy meeting.


In light of the "substantial further progress" the US economy has made toward the Fed's goals since December 2020, the committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for US Treasury securities and $5 billion for agency mortgage-backed securities, according to the statement.


Meanwhile, the Fed included the usual caveat that the taper pace could change if the FOMC deems it advisable. "The FOMC statement was almost unchanged in November with the exception of a taper to begin in November and to follow exactly the path laid out in the September minutes," Chris Low, Chief Economist at FHN Financial, said on Wednesday. "The tweak to the inflation language does not change the meaning but offers an explanation of the transitory factors the Fed believes underlie inflation pressures," he added.


Analysts at Zacks Investment Management noted that "the Fed is intentionally winding down its programs slowly, while widely telegraphing its plans to the market," adding "the taper and associated tightening are poised to happen very slowly, which should give the markets ample time to adjust."


Investors also sifted through the latest payroll data to assess the shape of US labor market. The US Labor Department reported on Friday that US employers added 531,000 jobs in October, higher than a gain of 450,000 jobs expected. The latest data followed upwardly revised job gains of 312,000 in September, and upwardly revised job gains of 483,000 in August, when labor market recovery slowed amid a Delta variant-fueled Covid-19 surge.


The unemployment rate edged down by 0.2 percentage points to 4.6 per cent in October, after dropping by 0.4 percentage points in September. The figure was down considerably from its recent high in April 2020, yet remained well above the pre-pandemic level of 3.5 per cent. The labor force participation rate was unchanged at 61.6 per cent in October and has remained within a narrow range of 61.4 per cent to 61.7 per cent since June 2020, according to the report. The participation rate is still 1.7 percentage points lower than that of February 2020.


A separate report by the Labor Department on Thursday showed that US initial jobless claims, a rough way to measure layoffs, registered 269,000 in the week ending October 30, a decrease of 14,000 from the prior week's revised level. Economists polled by The Wall Street Journal had estimated new claims would total a seasonally adjusted 275,000.

Latest News
Instagram new feature to make Comments made by people you do not like to be invisible to others Sun, Dec 05, 2021, 03:05 PM
Flipkart Offers 40-inch KODAK 7X Pro worth Rs.20,999 just @ Rs.5,999 Sun, Dec 05, 2021, 02:45 PM
Is Your Laptop Slowing Down ? Increase your Laptop Performance by following these tips Sun, Dec 05, 2021, 02:01 PM
AIFF bars Chennai City from I-League 2021-22, Kenkre FC named as replacement Sat, Dec 04, 2021, 10:30 PM
IND vs NZ, 2nd Test: I tried to bowl to the stumps and be consistent, says Siraj Sat, Dec 04, 2021, 10:28 PM
Uncertain Shakib picked in Bangladesh squad for New Zealand Tests Sat, Dec 04, 2021, 10:27 PM
Very illustrious group to be a part of, special that it came in Mumbai, says Ajaz on historic 10-wicket haul Sat, Dec 04, 2021, 10:25 PM
I know from now on the expectations will only go up: Kumble to Ajaz Sat, Dec 04, 2021, 10:24 PM
'Perfect 10': Ajaz Patel enters history books alongside Laker, Kumble Sat, Dec 04, 2021, 10:22 PM
Pune Open Golf: Chadha cruises to six-shot win, rookie Kartik posts career-best 2nd place Sat, Dec 04, 2021, 10:21 PM
IND vs NZ, 2nd Test: India tighten noose around Kiwis, lead by 332 runs Sat, Dec 04, 2021, 10:19 PM
Taking probiotics may improve nausea, vomiting in pregnancy Sat, Dec 04, 2021, 09:40 PM
England's Eileen Ash, world's oldest living Test cricketer, dies at 110 Sat, Dec 04, 2021, 09:38 PM
Scientists developing chewing gum that could reduce SARS-CoV-2 transmission Sat, Dec 04, 2021, 09:38 PM
2nd Test, Day 1: Pakistan 161/2 at stumps against Bangladesh Sat, Dec 04, 2021, 09:37 PM