US Stocks gain on Fed hawkish stance

23 Mar 2022 , 09:02 AM

The US share market finished session higher on Tuesday, 22 March 2022, recovering from narrow losses in the previous session, as investors evaluated Federal Reserve Chair Jerome Powells hawkish comments on monetary tightening to restore price stability.

The probability of a 50-basis point rate hike at the Feds policy meeting in May rose after Chair Jerome Powell said on Monday the central bank must move ?expeditiously? to combat inflation. The Fed had last week raised interest rates by 25 bps, the first increase since late 2018.

At the close of trade, the Dow Jones Industrial Average index rose by 254.47 points, or 0.74%, to 34,807.46. The S&P500 index gained 50.43 points, or 1.13%, to 4,511.61. The tech-heavy Nasdaq Composite Index was up by 270.36 points, or 1.95%, to 14,108.82.

Advancing stocks outnumbered declining ones on the NYSE exchange by 2032 to 1277 and 155 closed unchanged. In the NASDAQ, 3384 issues advanced, 1337 issues declined, and 279 issues unchanged.

Total 10 of 11 major S&P 500 sector indexes advanced, with bottom performing industry were consumer discretionary (up 2.45%), communication services (up 2%), financials (up 1.6%), and information technology (up 1.6%) issues, while bottom performing industry category included energy (down 0.66%).

On the winning side, bank shares gained on growing bets of aggressive interest rate increases by the Federal Reserve after Jerome Powell hinted in remarks to the National Association for Business Economics that central bank might raise interest rates to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings.

Shares of Alibaba moved sharply higher after the Chinese e-commerce giant increased its share buyback program to a record $25 billion.

Shares of athletic apparel and footwear giant Nike posted a notable gain after upbeat quarterly results and statement that manufacturing issues pinching sales over the past six months were now behind it.

Huttig Building Products shares surged after the company agreed to a $350 million takeover by Woodgrain.

Draganfly shares soared 86% after the company said it has received an order for critical life saving drones for deployment in Ukraine.

On the losing side, Upstart shares declined as Wedbush downgraded the stock to underperform from a neutral rating.

Shares of Okta moved to the downside after the authentication services provider said it is investigating reports of a digital breach.

Statera Biopharma shares slumped after the company said it has commenced an underwritten public offering of common stock and warrants.

Among Indian ADR, HDFC Bank added 1% to $62.46, ICICI Bank added 1.6% to $18.97, Dr Reddys Labs added 1.2% to $53.08, Wipro gained 1.5% to $8, WNS Holdings inclined 0.3% to $86.75, Tata Motors rose 2.8% to $28.61, and INFOSYS climbed up 2.4% to $24.79. Azure Power Global fell 4.2% to $18.93. MakeMyTrip rose 4.6% to $26.52.

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