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U.S. Stocks Extend Gains As Fed Punts on Tapering, Evergrande Cuts Debt Deal

Wall Street futures extended gains Wednesday after the Fed said remained vague as to when it will begin tapering its $120 billion in monthly bond purchases.

 

Wall Street extended gains Wednesday after the Federal Reserve remained vague as to when and how it will begin tapering its monthly bond purchases, easing concerns of a possible interest rate hike in the fall of next year.

The dovish tone from the Fed, which released its statement at 2:00 PM Eastern time, added fuel to a bullish session sparked by a potential deal on debt payments from troubled property group China Evergrande.

Evergrande said it struck a deal with creditors over a $36 million payment due on a yuan-denominated bond Thursday. The group also owes a $47.5 million payment on a separate note on the same day.

A $90 billion liquidity injection from the People's Bank of China, amid the re-opening of stock markets following two days of Autumn holiday celebrations, also suggests Beijing remains vigilant ahead of tomorrow's debt payment deadlines. 

The Evergrande breakthrough, alongside the passage of a bill by House lawmakers to fund the government through to December 3, while suspending the debt ceiling until the end of next year, gave stocks an early boost that was extended by the Fed decision. 

The Dow Jones Industrial Average gained 465 points in late-afternoon trading, while the S&P 500 was marked 55 points higher, paced by energy, financial and basic materials stocks 

The tech-focused Nasdaq Composite gained 175 points on the back of solid moves for Netflix  (NFLX) - Get Netflix, Inc. (NFLX) Report as well as China-based e-commerce groups JD.com  (JD) - Get JD.com, Inc. (JD) Report and Baidu Inc.  (BIDU) - Get Baidu, Inc. Sponsored ADR Class A Report

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FedEx  (FDX) - Get FedEx Corporation Report shares fell 8.4%, the most in 10 months, after the world's biggest package delivery group trimmed its full-year profit forecast following weaker-than-expected first quarter earnings linked to soaring wage costs.

Stitch Fix  (SFIX) - Get Stitch Fix, Inc. Class A Report soared more than 16.5% after the online personal shopping and styling service swung to a surprise fiscal-fourth-quarter profit and reached $2 billion in sales for the first time.

DraftKings  (DKNG) - Get DraftKings Inc. (DKNG) Report shares were also in focus as it boosted its bid for Entain to around $22.4 billion, but faces a potential legal challenge from the London-based gaming giant's U.S. joint-venture partner, MGM Resorts International (MGM) - Get MGM Resorts International (MGM) Report.

SoFi Technologies  (SOFI) - Get SOFI TECHNOLOGIES INC Report surged 11% to $16.85 after analysts at Jefferies initiated coverage of the online financial services company with a buy rating Wednesday, calling it a "flywheel of growth opportunity." 

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.15% lower at $93.085 as risk sentiment improved following the Fed statement, while benchmark 10-year note yields eased to 1.036%.

Oil prices were also active, with the weaker dollar and data from the Energy Department showing domestic crude stocks fell by 3.5 million barrels over the period ending September 17 to the lowest levels in nearly three years.

WTI crude futures for November delivery were marked $1.58 from last night's close at $72.08 per barrel while Brent crude contracts for November, the global benchmark, rose $1.69 to trade at $76.04 per barrel.