Stocks Close Higher as Fed Vows Continued Support for Economy

Stocks finish higher after the Fed vows to continue using all its tools to support the U.S. economy through the pandemic.
Author:
Publish date:

Stocks closed higher Wednesday after the Federal Reserve vowed to continue using all its tools to support the U.S. economy through the coronavirus pandemic.

Investors also are parsing the testimony of the chief executives of four top tech companies - Alphabet  (GOOGL) - Get Report, Amazon  (AMZN) - Get Report, Apple  (AAPL) - Get Report and Facebook  (FB) - Get Report - at a confrontational House hearing regarding their business practices.

The Dow Jones Industrial Average closed up 160 points, or 0.61%, to 26,441, the S&P 500 gained 1.24% and the Nasdaq rose 1.35%.

The Federal Reserve left its benchmark interest rate unchanged and said the "path of the economy will depend significantly on the course of the virus.” 

The central bank added that economic activity and employment, after steep declines, “have picked up somewhat in recent months but remain well below their levels at the beginning of the year."

The Fed reiterated that the coronavirus outbreak “poses considerable risks to the economic outlook over the medium term” and said rates would be held near zero “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

At a blockbuster House of Representatives hearing on Wednesday, the CEOs of the four tech firms faced tough questions about their business practices and defended themselves against the threat of antitrust charges. 

Shares of Google parent Alphabet moved up 1.3% to $1,523.51, Amazon shares tacked on 1.1% to $3,033.53, Apple added 1.9% to $380.16, and Facebook stock climbed 1.4% to $233.29.

Boeing  (BA) - Get Report posted a wider-than-expected second-quarter loss after the world's second-largest planemaker said it continues to be hurt by the impact of Covid-19, the disease caused by the coronavirus, and the grounding of the 737 MAX. Boeing shares fell 2.8% to $166.

General Electric's  (GE) - Get Report second-quarter loss was wider than expected but the company said its cash-burn rate was starting to improve and would likely turn positive by 2021. GE was down 4.4% to $6.59.

General Motors  (GM) - Get Report posted a second-quarter loss of 56 cents a share vs. year-earlier earnings of $1.66. Revenue of $16.8 billion beat Wall Street forecasts of $16.2 billion. The stock 1.7% to $25.89.

Meanwhile, Republicans and Democrats remain $2 trillion apart in their rival coronavirus relief plans, and the talks hit a snag over demands by Senate Majority Leader Mitch McConnell that liability protections for businesses, doctors and schools stemming from coronavirus cases be included in the aid package.

Treasury Secretary Steven Mnuchin said Wednesday the two sides were "very far apart."