Dow, S&P 500 supported by defensives after bruising selloff

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(Businesshala) – Gains in defensive stocks and Boeing helped the Dow and S&P 500 indexes recover some lost ground on Wednesday after concerns over inflation and rising Treasury yields turned one of Wall Street’s worst sales this year. gave birth to one.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York October 28, 2013. Businesshala/Carlo Allegri

Eight of the 11 major S&P sectors are growing between 0.7% and 1.6%, with advanced, healthcare, consumer staples, utilities and real estate.

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Investors stayed in relatively stable areas due to concerns about economic growth and a possible government shutdown.

Federal Reserve Chairman Jerome Powell also warned on Wednesday of medium-term economic uncertainty and said inflation is likely to remain high this year.

A 3.3% jump in Boeing Company shares also decimated the blue-chip Dow and the benchmark S&P 500.

Boeing said its 737 MAX test flight to China’s aviation regulator last month was a success and the planner expects to lift the two-year grounding this year.

The Nasdaq lagged behind its peers as key technology stocks, including Alphabet Inc and Facebook, remained under pressure from relatively high Treasury yields. Expectations of higher inflation are expected to keep yields higher this year.

Bob Shea, chief executive officer of TrimTabs Asset Management in New York, said: “I think a more bullish Fed (last week) had a very rapid adjustment and felt that inflation could be a little more sticky than tentative.” Is.”

“We are going to have short-term instability around the laxity of our very divided government. In the end they are usually forced to do the right thing, but watching this is generally an uncomfortable and volatile time period for the market. “

The US Congress has only two days left before the federal government shuts down many of its functions unless Democrats manage to pass a bill providing new funding for the fiscal year beginning Friday.

JPMorgan Chase & Co chief executive Jamie Dimon also warned that a US credit default would be a “potentially catastrophic” event.

The S&P 500 index is now poised to break its seven-month winning streak, as fears of a China Evergrande default, potentially lower than expected sooner by higher corporate taxes and the Fed clouded investor sentiment, which usually It is a seasonally weak month.

At 12:27 pm, the Dow Jones Industrial Average was up 102.30 points, or 0.30%, at 34,402.29, the S&P 500 was up 6.90 points, or 0.16%, at 4,359.53 and the Nasdaq Composite was up 37.51 points, or 0.26. %, at 14,509.17.

Among other movers, Dollar Tree Inc. jumped 15% when the discount retailer ramped up its share buyback plan to a total of $2.5 billion.

Advancing issues declined by a 1.42-to-1 ratio on the NYSE. Issues decline in the number of advances to a 1.13-to-1 ratio on the Nasdaq.

The S&P index posted three new 52-week highs and two new lows, while the Nasdaq posted 21 new highs and 108 new lows.

Reporting by Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel

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