New York, (Asian independent) Wall Street’s major averages closed mixed as investors pored through the US Federal Reserve’s new policy strategy on inflation and a slew of key economic data.
On Thursday, the Dow Jones Industrial Average rose 160.35 points, or 0.57 per cent, to 28,492.27. The S&P 500 increased 5.82 points, or 0.17 per cent, to 3,484.55. The Nasdaq Composite Index fell 39.72 points, or 0.34 per cent, to 11,625.34, Xinhua news agency reported.
Eight of the 11 primary S&P 500 sectors climbed, with financials and real estate up 1.7 per cent and 1.4 per cent, respectively, outpacing the rest. Communication services dipped 1.3 per cent, the worst-performing group.
Meanwhile, US-listed Chinese companies traded mostly lower, with eight of the top 10 stocks by weight in the S&P US Listed China 50 index ending the day on a downbeat note.
Fed Chairman Jerome Powell announced on Thursday that the central bank will seek to achieve inflation that averages 2 per cent over time, a new strategy for carrying out monetary policy to help fight the COVID-19 pandemic and boost economic recovery.
“Therefore, following periods when inflation has been running below 2 per cent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 per cent for some time,” Powell said in remarks to the Kansas City Fed’s annual Jackson Hole research conference, which is held virtually this year because of the pandemic.
“This is a subtle change, made because the old way of conducting policy did not work,” Chris Low, chief economist at FHN Financial, said in a note on Thursday, adding the move indicated “the era of preemptive monetary policy is over.”
On the data front, the US economy contracted at an annual rate of 31.7 per cent in the second quarter amid mounting COVID-19 fallout, the US Commerce Department reported Thursday.
Moreover, US initial jobless claims, a rough way to measure layoffs, came in at 1 million in the week ending August 22, following claims of 1.1 million in the prior week, said the Department of Labor. The reading was roughly in line with market expectations.