The main U.S. stock market indexes closed modestly higher on Wednesday, as easing government bond yields boosted risk appetite while a dramatic rally in shares of vaccine-maker Moderna drove gains in the healthcare sector.
Investors barely reacted to minutes from the U.S. Federal Reserve’s July meeting, which showed deepening concern about inflation with “several” policymakers ready to raise interest rates. “Many” said a rate hike would be needed if inflation does not decline to the U.S. central bank’s 2% target. But a day after the yield on the 30-year Treasury bond US30YT=RR hit its highest level since 2007, the yield fell on Wednesday along with the 10-year Treasury yield US10YT=RR. The moves came after the U.S. Treasury announced it would double the size of liquidity support buyback operations for longer-dated bonds.
Concerns over ballooning government debt and rising inflation had pushed global bond yields to multi-decade highs on Tuesday.
According to preliminary data, the S&P 500 .SPX .SPX gained 18.15 points, or 0.24%, to end at 7,709.91 points, while the Nasdaq Composite .IXIC .IXIC gained 40.08 points, or 0.15%, to 26,331.09. The Dow Jones Industrial Average .DJI .DJI rose 123.94 points, or 0.23%, to 53,467.34. Moderna’s MRNA.O MRNA.O shares surged more than after the company said its personalized mRNA cancer therapy developed with Merck MRK.N MRK.N cut the risk of melanoma recurrence and spread in a late-stage trial. Merck MRK.N MRK.N shares also jumped and it was the biggest gainer in the blue-chip Dow. Moderna’s rallyboosted healthcare peers such as Novavax NVAX.O NVAX.O and U.S.-listed shares of BioNTech BNTX.O.
The S&P 500 healthcare sector .SPXHC .SPXHC rallied sharply, hitting a record high and providing the biggest boost to the benchmark index from any of its 11 major industry sectors. The Nasdaq biotechnology index .NBI .NBI also jumped. S&P 500 information technology stocks .SPLRCT .SPLRCT dipped during the session with chip stocks leading losses.
However, Marvell Technologies MRVL.O MRVL.O shares climbed after it said it will help develop Google’s in-demand custom chips and has offered the search giant the right to buy a potential $12.2 billion stake. Marvell was one of the few gainers in the volatile Philadelphia semiconductor index .SOX .SOX , which ended lower. Google parent Alphabet’s GOOGL.O GOOGL.O shares were little changed during the session.
Target TGT.N TGT.N shares rose after the retailer raised its annual sales forecast. Lowe’s LOW.N LOW.N shares gained even after it trimmed its annual sales growth forecast and Estée Lauder EL.N EL.N shares jumped after the cosmetics maker forecast annual profit above Wall Street estimates.
Brent crude futures LCOc1 settled higher with Middle East progress still unclear.
Reporting by Sinéad Carew in New York, Avinash P and Purvi Agawal in Bengaluru; Editing by Pooja Desai and David Gregorio.
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