US stocks end at records after Fed tapering decision

Traders work on the floor of the New York Stock Exchange. PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks finished at fresh records on Wednesday (Nov 3) following a heavily-telegraphed Federal Reserve decision to scale back its stimulus programme.

For the fourth straight day, all three major indices ended at all-time highs, with the Dow Jones Industrial Average up 0.3 per cent to 36,157.58.

The broad-based S&P 500 gained 0.7 per cent to finish at 4,660.57, while the tech-rich Nasdaq Composite Index jumped 1 per cent to 15,811.58.

The Fed said it will begin to slow its stimulus bond purchases this month as it pointed to a solid recovery in the US economy.

Fed chief Jerome Powell stuck to his view that current higher-than-expected inflation levels will come down in the second half of 2022, defending the patient stance despite inflation trends that have prompted questions about whether the US central bank has misread the situation.

Major indices were in negative territory much of the day, but pushed upwards after the Fed announcement.

"It's natural to get nervous about a potential surprise," Art Hogan, chief strategist at National Securities said of the early trading.

But, "You got exactly what you expected," he said.

Earlier, data payroll service firm ADP said that private businesses hired 571,000 workers last month, a better-than-expected figure that comes ahead of Friday's important government jobs data for October.

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Among individual companies, Deere & Company shed 3.5 per cent after the United Auto Workers union voted against the latest contract offer, extending a strike that began three weeks ago.

Bed Bath & Beyond surged 15.2 per cent as it announced a collaboration with Kroger to market products on each other's e-commerce websites. The grocery chain jumped 5.5 per cent.

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Bed Bath & Beyond also said it would complete a US$1 billion (S$1.3 billion) share repurchase plan two years ahead of schedule.

Hertz fell 9.3 per cent to US$31.80 as it announced that some shareholders were selling 37.1 million shares, and the company plans to repurchase up to US$500 million worth.

The car rental company, which reorganized in US bankruptcy court also said it plans to apply to list on the Nasdaq.

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