4 minutes, by Read more: Powell believes the economy is still a long way from bond tapering; BofA slides as low interest rates harm lending; American Airlines, Delta Air rise on bullish forecasts; The Dow is up 0.37 percent, the S&P is up 0.42 percent, and the Nasdaq is up 0.48 percent. (Comments are added, and prices are updated to open) 14 JULY (Reuters) – The S&P 500 index soared to a new high on Wednesday, boosted by comments from the Federal Reserve, which raised confidence that the central bank will maintain its accommodative monetary policy despite a steep increase in inflation last month. In remarks prepared for a congressional hearing later in the day, Fed Chair Jerome Powell reassured investors that the job market in the United States is “still a ways off” from the progress the central bank wants to see before reducing its support for the economy, and that current high inflation will ease soon. “Markets have been caught in the middle of a tug of war between fears of rising inflation and fears of monetary policy tightening,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “And as long as Powell maintains that he will not raise rates, the market will continue to do well.” On Wednesday, data indicated that US producer prices grew faster than expected in June, a day after consumer prices rose at their fastest rate in 13 years. Energy and technology led early advances in the S&P 500, with nine of the 11 major sectors trading higher. In recent weeks, growing inflation has dominated Wall Street trading, with investors fearful that a combined punch of a probable Fed hawkish tilt and a spike in coronavirus infections will knock U.S. shares off record highs. Leading gains were growth-oriented equities such as Apple Inc, Microsoft Corp, and Amazon.com Inc, which jumped between 0.6 and 1.6 percent. An addition to J.P. Morgan’s “analyst focus list” as well as a price target increase boosted Apple’s stock. On Tuesday, JPMorgan Chase & Co and Goldman Sachs Group Inc reported strong earnings, kicking off the quarterly reporting season. Bank of America Corp reported a rise in second-quarter profit in line with banking peers, but its staple lending business was affected by low interest rates, sending its shares down 2.4 percent. Wells Fargo and Citigroup Inc both climbed 0.9 percent and 1.9 percent, respectively, as the bankers topped quarterly profit projections thanks to a reserve release rise. American Airlines increased by 5.4 percent after forecasting positive cash flow in the second quarter for the first time since the pandemic began, while Delta Air Lines increased by 0.6 percent after reporting good second-quarter results. According to IBES estimate data from Refinitiv, analysts forecast 66 percent rise in earnings for S&P 500 businesses in the second quarter, compared to a 30.6 percent fall in profit growth in the second quarter of 2020. The Dow Jones Industrial Average was up 127.43 points, or 0.37 percent, to 35,016.22, the S&P 500 was up 18.37 points, or 0.42 percent, to 4,387.58, and the Nasdaq Composite was up 69.93 points, or 0.48 percent, to 14,747.58 at 9:51 a.m. ET. Peloton Interactive’s stock fell 4.6 percent after Wedbush downgraded the interactive fitness equipment maker’s stock from “outperform” to “neutral.” On the NYSE, advancers outpaced decliners by a 2.80-to-1 ratio, while on the Nasdaq, advancers outnumbered decliners by a 1.30-to-1 ratio. The S&P 500 index hit 25 new 52-week highs and one new low, while the Nasdaq Composite hit 27 new highs and 43 new lows. (In Bengaluru, Devik Jain and Shreyashi Sanyal reported; Maju Samuel edited.)/n
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