US stocks were edging higher on Wednesday (US time), helped by a recovery in banks and industrial stocks. Bond yields were steady after rising earlier this week.
Investors continue to turn their attention to Washington, where Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen spoke before the Senate about the government’s stimulus efforts to combat the economic impact of the coronavirus pandemic.
In mid-afternoon trade, the S&P 500 index is up 0.4 per cent, the Dow Jones has added 0.8 per cent and the Nasdaq has fallen 0.8 per cent. The ASX is set to edge lower at the open, with futures at 5.05am AEDT pointing to a drop of 6 points, or 0.1 per cent, at the open.
Bank stocks, which took a beating on Tuesday, were among the best performers. Banks have been volatile the last couple of weeks as investors try to gauge the impact of higher interest rates on the US economy. Higher interest rates can slow economic momentum, but they also allow banks to charge more for loans.
Bank of America rose 0.9 per cent and JPMorgan Chase rose 1.4 per cent.
Technology stocks were modestly lower, pulling the technology-heavy Nasdaq down compared to the other indexes. Apple was down 1.3 per cent while Facebook fell 2.2 per cent and Microsoft fell 0.4 per cent.
GameStop sank 19.5 per cent after reporting results that missed Wall Street’s forecasts, though the stock is still up nearly eightfold since the beginning of the year after it became a social media darling for a swarm of online investors. The company took no questions from investors on its quarterly conference call late on Tuesday.
The pandemic remains a dominant topic for investors. Stocks fell on Tuesday after Germany, Europe’s biggest economy, and the Netherlands extended lockdowns and imposed new travel and business curbs in response to spikes in infection. That followed similar moves earlier by Italy and France.
“There’s a feeling that we’re not quite done with COVID-19 yet at all,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “That, combined with other concerns, is creating a lot of uncertainty.”