(MENAFN- Baystreet.ca) Dow Spikes Ahead of Fed Decision
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U.S. stocks rose on Wednesday ahead of the Federal Reserve's decision on monetary policy as stocks try to snap out of their September slump.
The Dow Jones Industrial Average popped 357.76 points, or 1.1%, to 34,227.60
The S&P 500 hiked 36.13 points to 4,390.32,
The NASDAQ Composite spiked 94.03 points to 14,840.43,
At the center of investor concerns is embattled Chinese property developer Evergrande, which is facing a possible default if it can't make millions of dollars in debt payments on U.S. dollar-denominated bonds this week.
Evergrande's shares in Hong Kong are down nearly 90% since July 2020 as China cracks down on real estate speculation. Investors worry about a step down in global economic growth if China slows its property market too much or lets Evergrande fail.
Helping sentiment overnight was word from Evergrande that its real estate group would pay the interest on time on a mainland-traded bond denominated in yuan.
Commodity-related stocks led the comeback Wednesday as fears eased about ripple effects from Evergrande. Dow, Freeport-McMoRan, Occidental Petroleum and Exxon were all early winners. China exposed Wynn Resorts bounced more than 2%.
FedEx shares tumbled 8% after profit fell at the shipper last quarter because of rising labour costs. FedEx also cut its forecast for the full year.
The Fed will conclude its two-day meeting on Wednesday and release a policy statement with economic and interest rate forecasts at 2 pm E.T. Chairman Jerome Powell will then hold a press conference after.
The central bank has the difficult task of soothing markets during a tumultuous month, while at the same time preparing investors for the removal of some monetary stimulus. Powell has previously said a tapering of the Fed's emergency $120 billion in monthly bond buying could begin as soon as this year.
On Fed decision days, stocks tend to trade higher throughout the morning and in the immediate aftermath of the release, but the market typically falls slightly when Powell speaks during his news conferences.
Prices for 10-Year Treasurys were unchanged, keeping yields at Tuesday's 1.32%.
Oil prices added $1.22 to $71.71 U.S. a barrel.
Gold prices docked $3.30 to $1,774.30 U.S. an ounce.
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