Stocks climbed to more record highs Wednesday after the Federal Reserve said it will begin dialing back the extraordinary aid for the economy it has been providing since the early days of the pandemic. The S&P 500 rose 29.92 points, or 0.6%, to 4,660.57. The Dow Jones Industrial Average rose 104.95 points, or 0.3%, to 36,157.58. The Nasdaq rose 161.98 points, or 1%, to 15,811.58. All three indexes also hit record highs Tuesday. The Russell 2000 index of smaller companies rose 42.42 points, or 1.8%, to a record high of 2,404.28.
Gains by banks, technology stocks, and a mix of companies that rely directly on consumer spending helped lift the market, the AP reports. Industrial, utilities, and energy stocks were among the decliners. Agricultural equipment maker Deere & Company fell 3.4%. Workers at the company rejected a contract offer Tuesday that would have given them 10% raises and decided to remain on strike in the hopes of securing a better deal. Investors were handed a mixed bag of corporate report cards. Activision Blizzard slumped 14.1% after the maker of video games like "World of Warcraft" gave investors a disappointing profit forecast. Zillow Group slid 22.9% after the real estate website operator reported disappointing financial results and said it is shutting down its home-flipping business.
The Fed's announcement was in line with what economists expected as the central bank moves to combat inflation that now looks likely to persist longer for longer than was expected a few months ago. "Much of the bond tapering announcement was already priced into markets and shouldn’t have come as a surprise to anyone that was paying attention to what the Fed has been indicating for most of this year," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "But the markets are already turning their attention to how soon the Fed will begin raising interest rates and how quickly they will raise them."
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