S&P 500 ends higher on growing hopes Fed will stay accommodative
By Caroline Valetkevitch
(Reuters) – U.S. stocks rose on Tuesday as investors hoped the Federal Reserve would stick with its supportive policy stance as the central bank’s two-day meeting got under way.
But the market was off its session highs as Apple Inc’s shares <AAPL.O> erased most of their gains from early in the day. The stock ended flat after briefly turning lower in the wake of its product event, which included the rollout of a new virtual fitness service and a bundle of all its subscriptions, Apple One.
Apple’s stock, which was up as much as about 3% early in the session and rose 3% on Monday, often dips after running up prior to that event.
The Nasdaq outperformed the other two major indexes, while the S&P 500 technology index <.SPLRCT> gained 1%, extending its recovery from a brutal sell-off earlier this month that had halted a Wall Street rally.
Investors were optimistic as the Fed began its first policy meeting since Chair Jerome Powell announced a more accommodative stance on inflation.
“While the economy is slowing, the upcoming macro news should be friendly, which should indicate the Fed will have no change in terms of policy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Data on Tuesday showed U.S. factory output increased strongly in August. Separately, U.S. import prices increased more than expected for the same month, supporting the view that inflation pressures were building up.
The Dow Jones Industrial Average <.DJI> rose 2.27 points, or 0.01%, to 27,995.6, the S&P 500 <.SPX> gained 17.66 points, or 0.52%, to 3,401.2 and the Nasdaq Composite <.IXIC> added 133.67 points, or 1.21%, to 11,190.32.
The S&P 500 financial index <.SPSY> fell 1.4%, with Citigroup Inc <C.N> dropping 6.9% following a report that federal regulators were preparing to reprimand the U.S. lender for failing to improve its risk-management systems.
JPMorgan Chase & Co <JPM.N> slipped 3.1% as it lowered its full-year net interest income forecast.
Advancing issues outnumbered declining ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and no new lows; the Nasdaq Composite recorded 63 new highs and 19 new lows.
Volume on U.S. exchanges was 8.99 billion shares, compared with the 9.33 billion average for the full session over the last 20 trading days.
(Additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and David Gregorio)