by Damien J Trois and Alex Viega
Stocks on Wall Street moved broadly higher on Wednesday, offsetting some of their losses a day after the benchmark S&P 500’s worst fall since May.
The S&P 500 was up 0.5% as of 3:40 p.m. Eastern. The Dow Jones Industrial Average was up 192 points, or 0.6%, at 34,487 and the Nasdaq was up 0.1%.
The mix of health care companies and companies that focus on consumer products is a big part of the gains in the S&P 500. Eli Lilly added 3.7% and Procter & Gamble added 1.4%.
Technology stocks also helped lift the market a day after leading the pullback. Apple rose 0.9% and IBM 1.3%.
Bond yields stabilized over the past week after a buoyancy and markets, especially technology stocks, weighed on. The high returns have forced investors to reevaluate whether prices are too high for the shares, as it makes them look expensive by comparison.
The yield on the 10-year Treasury, which is used to set interest rates on many types of loans, rose to 1.54% from 1.53% late Tuesday.
Markets in Asia fell mostly while those in Europe gained.
The broader market is still on its way to a disappointing September. The benchmark S&P 500 is headed for a loss of 3.4 per cent and its first loss since January. Investors have spent much of the month reviewing a mixed batch of economic data showing the impact of COVID-19 and the highly contagious delta variant on consumer spending and recovery in the job market.
Investors are still watching the Federal Reserve closely to see how a slowdown in economic growth will affect the pace of its plan to ease its extraordinary support for the economy. The central bank has said it plans to eventually reduce bond purchases which have helped maintain low interest rates.
Wall Street is also preparing for the next round of corporate earnings in the next few weeks. Investors will get a more detailed look at how supply chain problems and high costs are affecting corporate finance.
A wide range of companies have been warning investors about the impact of inflation on costs and profits. Nike, Costco and FedEx are among those that cited material costs, shipping delays and labor problems as concerns.
Sherwin-Williams became the latest company to warn that higher raw material costs would hurt profits. The stock gained 1.5% as investors read ahead with the announcement, but it’s still down nearly 8% from its all-time high of $308.70 on Sept.
Investors are still trying to figure out how persistent rising inflation will be as the economy works, and eventually recovers from the pandemic. The Fed has said higher inflation will likely be temporary and linked to an economic recovery, but more companies have indicated they expect higher costs.