Wall St higher as Fed's Powell says economy in 'good shape'

By Arjun Panchadar (Reuters) - Wall Street's main indexes rose on Wednesday as Federal Reserve Chair Jerome Powell said the domestic economy was in good shape and the central bank saw a 'sustained expansion' ahead. This helped ease nerves on Wall Street which opened lower after President Donald Trump on Tuesday offered no new details on trade negotiations with China. The benchmark S&P 500 and Nasdaq had hit new record levels in the run up to Trump's speech, but ended the session off their highs following his address.

Reuters November 14, 2019 02:06:32 IST
Wall St higher as Fed's Powell says economy in 'good shape'

Wall St higher as Feds Powell says economy in good shape

By Arjun Panchadar

(Reuters) - Wall Street's main indexes rose on Wednesday as Federal Reserve Chair Jerome Powell said the domestic economy was in good shape and the central bank saw a "sustained expansion" ahead.

This helped ease nerves on Wall Street which opened lower after President Donald Trump on Tuesday offered no new details on trade negotiations with China.

The benchmark S&P 500 <.SPX> and Nasdaq <.IXIC> had hit new record levels in the run up to Trump's speech, but ended the session off their highs following his address.

Powell's comments come after the Fed lowered borrowing costs three times this year to cushion the world's largest economy from a global slowdown. He said the full impact of the interest rate cuts were yet to be felt, as he testified before the Congress.

Meanwhile, data showed U.S. consumer prices rebounded more than expected in October and underlying inflation picked up.

"There's still enough gas in the tank to keep the economy moving," said Jeff Kravetz, regional investment director at U.S. Bank's private wealth management unit.

Six of the 11 major S&P 500 sectors were higher led by gains in defensive names such as utilities <.SPLRCU>, real estate <.SPLRCR> and consumer staples <.SPLRCS>, indicating investor caution.

An impeachment inquiry on President Donald Trump, as well as geopolitical tensions including the escalating anti-government protests in Hong Kong are factors that investors are keeping a close eye on.

The three major U.S. stock indexes have had a solid start to this month on the back of a strong corporate earnings season and hopes of a trade deal.

"Earnings are good, rates are low, the consumer is happy — all of those provide a pretty solid backdrop for markets to scale even higher," Kravetz said.

A 4.4% jump in shares of Walt Disney Co boosted the blue-chip Dow Jones index as the entertainment company said its newly launched streaming service Disney+ reached 10 million sign-ups in a day.

Shares of Netflix Inc fell 2% on the news.

At 1:09 p.m. ET the Dow Jones Industrial Average <.DJI> was up 71.97 points, or 0.26%, at 27,763.46, while the S&P 500 <.SPX> was up 5.01 points, or 0.16%, at 3,096.85. The Nasdaq Composite <.IXIC> was up 9.73 points, or 0.11%, at 8,495.83.

Shares of Alibaba Group Holding Ltd slipped 2.2% as the Chinese e-commerce giant revealed plans to launch a Hong Kong share sale to raise up to $13.4 billion.

SmileDirectClub Inc slumped 18.3% as the teeth alignment company posted a bigger quarterly loss and pointed towards more losses for the year.

Declining issues outnumbered advancers for a 1.14-to-1 ratio on the NYSE and a 1.22-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and one new low, while the Nasdaq recorded 65 new highs and 96 new lows.

(Reporting by Arjun Panchadar and Agamoni Ghosh in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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