US stocks rally on Evergrande assurances, Fed decision

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

NEW YORK (AFP) - Wall Street stocks advanced on Wednesday (Sept 22) following reassurances from China's Evergrande over its finances, while the Federal Reserve kept interest rates low, as expected.

The embattled Chinese property titan said it had agreed to a deal with domestic bondholders that should allow it to avoid missing one of its interest payments, somewhat mollifying a major source of market angst this week.

Worries about the fallout from an Evergrande failure had slammed stocks on Monday.

Later, the Fed kept interest rates low, while adding that it may nonetheless "soon" be ready to begin removing stimulus it provided during the pandemic.

The Dow Jones Industrial Average finished up 1 per cent at 34,258.32.

The broad-based S&P 500 gained 1 per cent to finish at 4,395.64, while the tech-rich Nasdaq Composite Index also won 1 per cent to close at 14,896.85.

National Securities chief strategist Art Hogan attributed the rally to the better Evergrande news, saying, "it feels like we've reconciled that Evergrande is not going to be the start of a financial crisis".

Mr Hogan said investors are not especially worried about the building debate in Washington over raising the debt ceiling. Congressional Republican leaders have thus far refused to cooperate with the ruling Democrats to increase the borrowing limit.

Among individual stocks, FedEx plunged 9.1 per cent as it cut its profit forecast due to higher labour costs and expenses tied to global supply chain upheaval.

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Facebook also had a bad day, shedding 4 per cent as it warned that Apple's iPhone privacy changes, which allow users to block tracking, are significantly hitting its advertising revenues because less data can be collected.

Also Wednesday, Toast shot up 56.3 per cent in its first session as a public company. The company's cloud-based platforms are used by some 48,000 restaurants.

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