US stocks extend post-Fed rally, Dow up 1.5%

Traders work on the floor of the New York Stock Exchange in New York City, on Sept 22, 2021. PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks climbed for a second session in a row on Thursday (Sept 23), shrugging off disappointing labour data and rallying on improved sentiment about China's embattled Evergrande and United States monetary policy.

Investors are feeling better about Evergrande's situation following steps by Beijing to avoid a domino effect from the property giant's debt travails.

Analysts also cited rising certainty about the Federal Reserve's intentions after Chair Jerome Powell said the central bank was near to starting the tapering of asset purchases. Many expect the Fed will announce the shift in November.

TD Ameritrade chief market strategist JJ Kinahan said the Fed "at least started to talk a little bit more in timeframes".

"And you know, the Fed still remains the number one story, so any clarity you get from them is looked upon very favourably."

The Dow Jones Industrial Average ended at 34,764.82, a 1.5 per cent increase.

The broad-based S&P 500 gained 1.2 per cent to 4,448.98, while the tech-rich Nasdaq Composite Index advanced 1 per cent to 15,052.24.

Major indexes advanced about 1 per cent on Wednesday after the Fed's policy announcement.

Investors looked past government data that showed a slight uptick in unemployment claims, a second straight increase in the weekly benchmark.

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Mr Kinahan said investors were less worried about Evergrande compared with earlier in the week when they feared it would spur a financial crisis. But he said volatility could return as the situation plays out.

"When you have these types of big stories, they tend to come back," Mr Kinahan said. "So I wouldn't say that situation is over."

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