NY Stock Market Rises Again Consecutively... Tapering Fear Disappears Amid Strong Corporate Earnings

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange hit record highs once again a day before the U.S. Federal Reserve's (Fed) decision on tapering asset purchases. Analysts suggest that strong corporate earnings are causing investors to overlook the major event of monetary policy normalization.

On the 2nd (local time), the Dow Jones Industrial Average rose 138.79 points (0.39%) to close at 36,052.63, the S&P 500 index increased by 16.98 points (0.37%) to 4,630.65, and the Nasdaq index climbed 53.69 points (0.34%) to finish at 15,649.60.

On this day, the Dow crossed 36,000 for the first time ever at closing. Following an intraday record set the previous day, the Dow continued its unstoppable upward trend. The S&P 500 and Nasdaq also closed at all-time highs once again.

From this day through the 3rd, the Federal Reserve is expected to hold its Federal Open Market Committee (FOMC) regular meeting and announce tapering, but market concerns are not being felt.

This is because strong corporate earnings are driving the stock market's upward momentum. According to FactSet, as of the previous day, 83% of S&P 500 companies that have reported earnings have exceeded expectations.

On this day as well, Pfizer and Under Armour shares rose approximately 4% and 16%, respectively, following news that their quarterly net profits exceeded expectations and their annual earnings forecasts were raised. DuPont and Est?e Lauder shares also rose more than 8% and 4%, respectively, on better-than-expected net income and sales.

Rental car company Avis even showed a phenomenal 100% surge after announcing strong earnings. Semiconductor company ON Semiconductor also surged 4%, hitting a record high amid positive evaluations of its fourth-quarter guidance.

Jim Paulson, Chief Investment Strategist at Leifold Group, analyzed, "Fundamentals are the source of why the stock market continues to rise."

He added, "The earnings season is proving to be much stronger than expected. Many companies are warning about supply chain issues, but thanks to strong demand, they are increasing profits through price hikes. There has been no fear of declining profit margins," he evaluated.

Investing.com reported that despite the start of the FOMC meeting, Wall Street is betting on strong earnings.

Despite the upcoming tapering, U.S. Treasury yields continued to decline. The 10-year U.S. Treasury yield fell by 0.02 percentage points to 1.547% on this day.

There are also opinions that tapering could be a factor causing stock market declines. Melissa Brown, Chief Investment Officer at Quantigo, expressed concern, saying, "The Fed's decision could exert downward pressure on the stock market," and "Investors are moving away from conservative investments and engaging in more aggressive investing."

This content was produced with the assistance of AI translation services.