NEW YORK (AFP) – Wall Street stocks resumed their upward climb on Wednesday (Aug 21), finishing solidly higher after solid retailer earnings and following Federal Reserve minutes that included no bombshells on monetary policy.
The gains came despite a brief inversion near the end of the session of yields on the two- and 10-year Treasury notes, a harbinger of past recessions and a trigger for a major selloff earlier this month.
The Dow Jones Industrial Average rose 0.9 per cent to finish the day at 26,202.73, not moving significantly after the yield curve inversion.
The broad-based S&P 500 gained 0.8 per cent to close at 2,924.43, while the tech-rich Nasdaq Composite Index won 0.9 per cent to end at 8,020.21.
Big box chains Target and Lowe’s reported higher profits on strong gains in comparable store sales, offering the latest confirmation that US consumers remain strong despite weakness in manufacturing and key overseas markets.
Target surged 20.4 per cent, while Lowe’s gained 10.4 per cent.
Minutes from the Fed’s July 31 meeting said the US central bank will remain flexible and interest rates will not be on a “preset course” in the face of persistent risks from trade uncertainty and weak global growth.
On July 31, policymakers cut the key interest rate for the first time in more than a decade, a move characterised in the minutes as “part of a recalibration… or mid-cycle adjustment.”
The minutes “didn’t dissuade investors from the concept that the Fed might be lined up to cut rates again at some point this year,” said Art Hogan chief market strategist at National Securities.
Among other stocks, Tesla fell 2.2 per cent after the company was sued by Walmart over fires from solar panels. Walmart was flat.