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S&P 500 closes at record after Fed says economy is strong enough for it to slow pandemic bond buying

Stocks rose to new records on Wednesday after the Federal Reserve made its long-anticipated announcement to slow the monthly bond purchases the central bank implemented during the pandemic.

Major averages climbed steadily into the green as the central bank said it will begin to scale back the bond buying later this month and reiterated that it would be in no rush to raise interest rates after finishing the taper next year.

The Dow Jones Industrial Average rose 104.95 points to 36,157.58, after being down more than 160 points earlier in the session, and closed at a new record. The S&P 500 traded up 0.65% to 4,660.57 to a new all-time high. The Nasdaq Composite added 1% to 15,811.58 and closed at a record. This is the fourth session in a row that all three major averages closed at new highs.

The Russell 2000 rose 1.8% to 2,404.28 and notched a record close. The small-cap benchmark is up 4.7% this week.

Strong earnings have helped lift the market back to records. Of the S&P 500 companies that have reported so far this earnings season, 80.9% of them have beat consensus expectations, according to FactSet. That’s despite ongoing supply chain disruptions, labor challenges, commodity inflation, central bank policy and Covid risk.

Wednesday’s ADP report showed that private job creation rose in October, thanks to a burst in hiring in the hospitality sector. Companies added 571,000 for the month, beating the 395,000 Dow Jones estimate and just ahead of September’s downwardly revised 523,000. It was the best month for jobs since June.

Reference: CNBC