Close Update: US Stocks Edge Higher as Fed Chair Powell Speaks Before Congress

Last Updated: Tuesday, June 22, 2021 4:46 PM | MT Newswires

US stocks edged higher as Federal Reserve Chairman Jerome Powell maintained that the Fed will not raise rates pre-emptively and that it will respond to shortfalls in unemployment.

The Dow Jones Industrial Average rose by 0.2% to 33,945.58 and the S&P 500 was up by 0.5% to 4,246.44, nearly hitting a record. The Nasdaq Composite was higher by 0.8% at 14,253.27 with a new intraday high. Consumer discretionary and communication services and technology were the biggest gainers while utilities and real estate were the only decliners among the sectors.

In prepared remarks released before his testimony on the coronavirus crisis, Powell said gross domestic product is set to post its fastest growth in decades. He reiterated the recent increase in the inflation rate -- 5% annualized in May -- is due to factors including a rebound in spending, higher oil prices impacting consumer energy costs and supply bottlenecks.

"As these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal," he said in the remarks.

Meanwhile, existing-home sales fell for the fourth consecutive month on tight inventory and fading home suburb demand, the National Association of Realtors said Tuesday. Sales dropped 0.9% in May to a seasonally adjusted annual rate of 5.8 million. That was above the Econoday consensus of 5.72 million.

Bitcoin was slightly lower, trading at $32,759.34.

West Texas Intermediate futures dropped 0.8% to $73.06. The US 10-year yield fell by 1.2 basis points to 1.47%.

In corporate news, L Brands (LB) said in connection with the separation of the Victoria's Secret business into an independent, public company that the new firm Victoria's Secret & Co. will include Victoria's Secret Lingerie, PINK and Victoria's Secret Beauty. Shares rose 5% higher, the most on S&P 500.

GameStop (GME) completed a second stock sale in as many months, this time selling 5 million shares for gross proceeds of about $1.13 billion as the video-game retailer benefitted from the surge this year in its share price. Shares traded 10% higher.

Splunk (SPLK) is set to receive a $1 billion investment from Silver Lake as the company plans to use the proceeds to buy back shares and push ahead with plans to fund new growth initiatives. Shares jumped by 11.3%.

In the metals markets, gold slipped 0.3% to $1,778.10, silver dropped 0.8% to $25.86 an ounce but copper rose 1% to $4.23 per pound.

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