The stock market strengthened at midday Wednesday after Fed Chairman Jerome Powell indicated that he supports a quarter-point interest-rate increase, rather than a more aggressive half-point hike. Meanwhile, oil prices hit an 11-year high.
The Nasdaq composite climbed 1%, while the S&P 500 gained 1.5%. Small caps led as the Russell 2000 jumped 1.8%.
The Dow Jones Industrial Average also rose 1.5%. Salesforce.com was the only Dow stock lower at midday after January-quarter earnings and revenue beat analyst estimates. The enterprise software company's sales guidance was above expectations but its profit forecast missed views.
Volume fell on the NYSE and Nasdaq compared with the same time on Tuesday.
In testimony to Congress, Powell said he supports a quarter-point rate increase at the March 15-16 Fed meeting and not a half-point hike. He added that the economic impacts of Russia's invasion of Ukraine make the rate outlook murky. Stocks gained strength after Powell's remarks.
"We will need to be nimble in responding to incoming data and the evolving outlook," Powell said. Stock market futures gave up some gains after the prepared testimony was released before the market open.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33798.02 | +503.07 | +1.51 |
| S&P 500 | (0S&P5) | 4370.54 | +64.28 | +1.49 |
| Nasdaq | (0NDQC ) | 13666.84 | +134.38 | +0.99 |
| Russell 2000 | 203.22 | +3.73 | +1.87 | |
| IBD 50 | 38.09 | +0.82 | +2.20 | |
Last Update: 11:48 AM ET 3/2/2022 |
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The yield on the 10-year Treasury note jumped 13 basis points to 1.84%. The benchmark yield had slid about 28 basis points earlier this week as Russia pressed its invasion of Ukraine and nations placed more sanctions on Russia.
Stock Market Up Despite Oil Surge
The price of U.S. crude oil jumped to an 11-year high above $112 a barrel earlier and was up 2.5% to $106 around midday. The OPEC+ group of major oil producers agreed to extend its existing goal of adding 400,000 barrels per day each month through April. OPEC+, which includes Russia, is under pressure to boost its target to help ease oil prices. But group members are struggling to produce enough oil even to meet current targets.
Fighting continued in Ukraine, where Russian forces shelled major cities, but Ukrainians continued to offer stiff resistance.
Nordstrom soared 37%. after the department store chain beat January-quarter profit expectations late Tuesday. The results extended a string of bullish results for major retailers.
Ross Stores rallied nearly 8% after it also beat expectations. Both Ross and Nordstrom gave strong outlooks. The results followed Target and Kohl's on Tuesday, which climbed after their holiday-quarter results.
Innovator IBD 50 ETF rallied 2.2%.
KBR, Tuesday's IBD Stock of the Day, rose 2.5% and is rising above the 50.09 buy point of a cup base. Miner Rio Tinto rose 4.2% and is also above a buy point. UnitedHealth Group climbed above its 50-day moving average as it forms a double bottom.
Economic Reports In Stock Market's Eye
Besides Powell's testimony, the other major economic news this morning is the ADP employment report, which showed a rise of 475,000 jobs in February. That's well above economists' forecasts for a 320,000 increase, according to Econoday. In another positive surprise, the January estimate went from a loss of 301,000 jobs to a gain of 509,000.
Peter Essele, head of portfolio management for Commonwealth Financial Network, noted a trend in which larger businesses are expanding jobs much more than small businesses. Small businesses (1-49 employees) shed jobs for the first time since April of 2020, while large businesses (500 or more workers) saw the third largest monthly job gain in 10 years.
"The dynamic in February is the extension of a trend that began in August 2021, where large business employment began to outpace small and medium business hiring in the recovery," Essele said. "The trend may reflect changing preferences in the labor force, with workers pivoting toward larger-scale businesses that potentially offer more benefits and higher wages."
Friday morning, the stock market gets the Labor Department's February jobs report. Economists expect an increase of 390,000 nonfarm jobs.
