NEW YORK – Wall Street stocks advanced yesterday following reassurances from China’s Evergrande over its finances, while the Federal Reserve kept interest rates low, as expected.
The embattled Chinese property titan said it has agreed to a deal with domestic bondholders that should allow it to avoid missing one of its interest payments, somewhat mollifying a major source of market angst this week.
Worries about the fallout from an Evergrande failure slammed stocks on Monday.
Later, the Fed kept interest rates low, while adding that it may nonetheless “soon” be ready to begin removing stimulus it provided during the Covid-19 pandemic.
The Dow Jones Industrial Average finished up 1% at 34,258.32.
The broad-based S&P 500 gained 1% to finish at 4,395.64, while the tech-rich Nasdaq Composite Index also won 1% to close at 14,896.85.
Art Hogan, chief strategist at National Securities, attributed the rally to the better Evergrande news, saying “it feels like we’ve reconciled that Evergrande is not going to be the start of a financial crisis”.
He said investors are not especially worried about the building debate in Washington over raising the debt ceiling.
Congressional Republican leaders have thus far refused to cooperate with the ruling Democrats to increase the borrowing limit.
Among individual stocks, FedEx plunged 9.1% as it cut its profit forecast due to higher labour costs and expenses tied to global supply chain upheaval.
Facebook also had a bad day, shedding 4% as it warned that Apple’s iPhone privacy changes, which allow users to block tracking, are significantly hitting its advertising revenues because less data can be collected.
Also yesterday, Toast shot up 56.3% in its first session as a public company. The company’s cloud-based platforms are used by some 48,000 restaurants. – AFP, September 23, 2021
