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Wall Street gives up gains on Fed official's warning

Wall Street gives up gains on Fed official's warning

A Federal Reserve official's warning about a possible resumption of interest rate hikes rattled Wall Street Tuesday, wiping out an early advance and leaving stocks narrowly higher by the close.
The comments by Chicago Fed President Michael Moskow unnerved investors looking to revive last week's rally after having collected profits on Monday. Retailers and other sectors dependent on consumer spending were among the stocks causing the major indexes to wobble after Moskow said, "some additional firming of policy may yet be necessary to bring inflation back into the comfort zone within a reasonable period of time."
The Dow Jones industrial average dipped 5.21, or 0.05 percent, to 11,339.84 after been up more than 38 points early in the session. Advancers beat decliners on the New York Stock Exchange and the Nasdaq Stock Market.
Broader stock indicators edged higher. The Standard & Poor's 500 index rose 1.30, or 0.10 percent, to 1,298.82, and the Nasdaq composite index gained 2.27, or 0.11 percent, to 2,150.02.
Bonds held their ground, with the yield on the benchmark 10-year Treasury note falling to 4.81 percent from 4.82 percent. The dollar maintained its gains against other major currencies, while gold prices edged lower.
The 10-year treasury yields have been trading near their lowest in five months, inspired by data last week that indicated the Federal Reserve's attack on inflation was working. Several economic reports issued last week - including one that showed benign inflation data - help convinced investors the economy was headed toward a "soft landing."
Wall Street wants the economy to slow so inflation is contained but still grow enough to keep corporate profits strong. Moskow's comments helped reverse the effects of last week's hopes.
Gains from Advanced Micro Devices Inc. and XM Satellite Radio Holdings Inc. helped send technology stocks higher.
Advancing shares outnumbered decliners by nearly 4 to 3 on the New York Stock Exchange.
The Russell 2000 index of smaller companies rose 2.43, or 0.34 percent, to 707.76.


Updated : 2021-10-18 23:14 GMT+08:00