U.S. equities post mixed results amid Fed minutes, economic data

U.S. equities post mixed results amid Fed minutes, economic data

May 23, 2021

New York (US), May 23: Wall Street's major averages posted mixed results for the week as investors digested minutes from the Federal Reserve's most recent policy meeting and a slew of economic data.
For the week ending Friday, the Dow declined 0.5 percent, and the S&P 500 fell 0.4 percent, while the tech-heavy Nasdaq Composite eked out a gain of 0.3 percent.
The Nasdaq snapped a four-week losing streak, while the S&P 500 and Dow each posted a second straight week of losses.
The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly rise of 2.9 percent.
Equity markets were rattled a bit on Wednesday, following the release of minutes from the Fed meeting in late April.
Some U.S. Federal Reserve officials signaled that they would be open to start discussing tapering the central bank's asset purchase program at upcoming meetings, according to the minutes of the Fed's recent policy meeting released Wednesday.
"A number of participants suggested that if the economy continued to make rapid progress toward the Committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," the Fed said in the minutes of its April 27-28 meeting, referring to the Fed's policy-making committee.
The Fed has pledged to keep its benchmark interest rates unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until the economic recovery makes "substantial further progress."
"Most of the Fed's language seemed to indicate that inflation was being watched but that the risk was balanced and the inflation outlook was transitory. Even still, some market watchers saw signs that 'tapering' (a form of tightening) would be a topic in upcoming meetings," analysts at Zacks Investment Management said in a note on Saturday.
"Taper talk tends to instigate volatility in the equity markets, but recent history also shows it can be short-lived," they added.
Meanwhile, a batch of newly-released economic data made the investors to assess the shape of economic recovery.
The flash reading of U.S. composite output index rose to 68.1 in May from 63.5 in April, London-based information provider IHS Markit reported on Friday.
The IHS Markit Flash U.S. Services Business Activity Index registered 70.1 in May, up from 64.7 in April, while the Flash U.S. Manufacturing PMI (Purchasing Managers' Index) stood at 61.5 from 60.5 in April, showed the report.
U.S. initial jobless claims, a rough way to measure layoffs, decreased by 34,000 to 444,000 in the week ending May 15, a fresh pandemic-era low, the Department of Labor reported on Thursday. Economists surveyed by Dow Jones had been expecting 452,000 new claims.
The Empire State manufacturing index, a key metric to gauge business activity growth in New York State, slipped to 24.3 in May from 26.3 in April, the New York Federal Reserve said Monday. Economists surveyed by The Wall Street Journal expected a reading of 24.8. The Empire State report is widely viewed as a leading indicator of national trends, drawing market attention.
Source: Xinhua