Markets Live, Wednesday, November 3, 2021

Wall Street added its latest string of milestones on Tuesday as stock indices hit new highs and the Dow Jones Industrial Average closed above 36,000 points for the first time.

The Dow and benchmark S&P 500 each rose 0.4 per cent. Nasdaq rose 0.3 pct. The three indices also reached record highs on Monday.

The gain was wide, with all but two of the 11 sectors in the S&P 500 closing higher. Technology and health stocks helped drive much of the progress. Losses in energy stocks and a mix of companies relying on direct consumption dampened market gains.

Trading continued to falter, with the major indices all briefly falling into the red before recovering. The recent modest gains came ahead of more news this week from the Federal Reserve and into the labor market. Investors also underwent a major strain on corporate earnings to get more clues as to how companies are doing as the economy moves past the virus pandemic.

Corporate earnings have been better than Wall Street expected.

Corporate earnings have been better than Wall Street expected. Credit:AP

Wall Street has been pleasantly surprised that corporate earnings reports have proven stronger than expected, despite concerns about the impact on profits from supply disruptions and rising inflation.

“They seem to be dealing with the supply chain issue in terms of revenue and costs, so far,” said Liz Young, chief investment strategist at SoFi. “We all expected earnings in the third quarter to be held back a bit by some of that pressure.”

The S&P 500 index extended its winning streak to a fourth day on Tuesday, rising 16.98 points to 4,630.65. The Dow gained 138.79 points to 36,052.63, and the technology-heavy Nasdaq added 53.69 points to 15,649.60.

Technology stocks rose solidly. Cloud networking company Arista Networks rose 20.4% for the biggest gain in the S&P 500 after giving investors an encouraging financial forecast following a strong third-quarter report.

Bond yields fell. The yield on the 10-year government bond fell to 1.54 percent from 1.57 percent late Monday.

Crude oil prices fell 0.2 per cent. and weighed on energy reserves. Exxon Mobil fell 1.2 percent.

Wall Street has focused on a steady stream of corporate earnings over the past few weeks. The results helped create gains for the major indices after a choppy summer in which COVID-19 cases rose. That wave has since abated, but rising inflation as the economy recovers remains a key problem.

Investors will be focused on the recent comments from the Federal Reserve’s most recent political meeting on Wednesday, in which the central bank is expected to announce plans to ease the extraordinary support measures introduced at the start of the pandemic to strengthen markets and the economy.

President Jerome Powell has signaled that the Fed will announce after its political meeting that it will start offsetting its $ 120 billion in monthly bond purchases as early as this month. These purchases are intended to keep long-term borrowing rates low to encourage borrowing and spending.

“We all know that the Fed wants to relax, what is not known is the language around employment and how the Fed hits, what success looks like,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management.

The upswing in the labor market has been a key focus for the central bank. The labor market has been improving, but it has mostly lagged behind the rest of the economic recovery as people hesitate to return to work despite an abundance of job vacancies. Investors will get another update on Friday when the Ministry of Labor publishes its job report for October.

The central bank’s plan to reduce its bond purchases also comes as companies and consumers struggle with higher prices for commodities and finished goods. Supply chain problems cut companies’ finances and cause companies to raise prices.

Investors will get another update on services, which make up a large part of the economy, when the Department of Procurement Management publishes its service sector index for October on Wednesday.


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