Dow crosses 33K for first time, Fed to keep rates low

Powell signals rates to stay low until 2023 at least

U.S. equity markets battled higher Wednesday as investors digested the Federal Reserve’s latest policy decision and comments from Chairman Jerome Powell.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 33815.9 -321.41 -0.94%
SP500 S&P 500 4134.98 -38.44 -0.92%
I:COMP NASDAQ COMPOSITE INDEX 13818.412584 -131.81 -0.94%

The Dow Jones Industrial Average gained 190 points, or 0.58%, crossing the 33,000 level for the first time. Meanwhile, the S&P 500 and the Nasdaq Composite were higher by 0.29% and 0.4%, respectively. The tech-heavy Nasdaq had fallen by as much as 1.48% ahead of the Fed's decision.

The central bank kept policy on hold and said it would continue to use the full range of tools at its disposal in order to support the U.S. economy and help meet its goals of maximum employment and price stability.

Projections showed the Fed sees core personal consumption expenditures, its preferred inflation measure, reaching 2.2% this year before next year retreating to its 2% target. The central bank also sees the U.S. economy expanding at a 6.5% pace this year, up from its December forecast of 4.2% growth.

10-Year Yield Rising

The stock-market rally comes as the 10-year yield trades up 4 basis points to a 13-month high of 1.66%. Rising bond yields will remain in focus in the days ahead as traders worry a move towards 2% could put further pressure on equities.

CORONAVIRUS NO LONGER BIGGEST WORRY FOR FUND MANAGERS

Ticker Security Last Change Change %
GS THE GOLDMAN SACHS GROUP, INC. 330.85 -4.42 -1.32%
JPM JPMORGAN CHASE & CO. 147.37 -3.17 -2.11%

Looking at stocks, Dow components Goldman Sachs Group Inc. and JPMorgan Chase & Co. outperformed as the selloff in the bond market steepened the yield curve.

Ticker Security Last Change Change %
TSLA TESLA, INC. 719.69 -24.43 -3.28%
AAPL APPLE, INC. 131.94 -1.56 -1.17%
FB FACEBOOK, INC. 296.52 -4.95 -1.64%

Elsewhere, mega-cap technology stocks, including Tesla Inc., Apple Inc. and Facebook Inc., recouped the lion's share of their losses that came earlier Wednesday morning as bond yields rose.

Ticker Security Last Change Change %
TSLA TESLA, INC. 719.69 -24.43 -3.28%
AAPL APPLE, INC. 131.94 -1.56 -1.17%
FB FACEBOOK, INC. 296.52 -4.95 -1.64%

In deals, optical fiber firm Lumentum Holdings raised its offer for rival Coherent Inc. to $6.9 billion, consisting of $220 per share in cash and 0.61 Lumentum shares for each share owned. The offer is the latest in a bidding war between Lumentum, MKS Instruments and optical components maker II-VI.

Ticker Security Last Change Change %
LITE LUMENTUM HOLDINGS 92.30 -0.82 -0.88%
COHR COHERENT 265.30 -1.70 -0.64%

Uber Technologies Inc. reclassified its more than 70,000 drivers in the U.K. as employees, meaning they will receive the minimum wage, vacation time, and access to a pension plan. The decision comes after the company last month lost a U.K. Supreme Court case last month that gave workers the rights of worker status while allowing them to work flexibly.

Ticker Security Last Change Change %
UBER UBER TECHNOLOGIES, INC. 56.28 +0.51 +0.91%

Plug Power Inc. shares were sharply lower after the hydrogen and fuel-cell technology company said it would restate financial statements in fiscal years 2018 and 2019 and quarterly filings for 2019 and 2020 due to accounting errors. The changes are not expected to impact Plug's cash position, business operations or economics of commercial arrangements and the company maintained its gross billings targets.

Ticker Security Last Change Change %
PLUG PLUG POWER 26.50 -0.64 -2.36%

In earnings, retailer Lands' End Inc. reported better-than-expected earnings and announced plans to expand its relationship with Kohl's Corp.

Ticker Security Last Change Change %
LE LANDS END 24.00 +0.22 +0.93%
KSS KOHL'S CORP. 58.36 -0.81 -1.37%

In commodities, West Texas Intermediate crude oil lost 20 cents to $64.60 per barrel while gold fell $3.80 to $1,726.80 an ounce.

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Overseas markets finished little changed.

In Europe, Britain’s FTSE 100 traded lower by 0.6%, France’s CAC 40 ticked down 0.01% and Germany’s DAX 30 gained 0.03%.

Markets were little changed across Asia with China’s Shanghai Composite index and Japan’s Nikkei 225 slipping 0.03% and 0.02%, respectively, while Hong Kong’s Hang Seng index edged up 0.02%.