Dow Jones soars 507 points as investors shrug off Fed tapering signals

U.S. stock markets booked strong gains for a second consecutive session on Thursday as investors digested the Federal Reserve’s plans for tapering its asset purchases and raising interest rates.

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The Dow Jones Industrial Average rose 507 points, or 1.48%, while the S&P 500 index and the Nasdaq Composite index advanced 1.21% and 1.04%, respectively. The Dow was up more than 621 points at session highs. Stocks are now marginally positive for the week.

The gains came a day after all three of the major averages jumped about 1% after Federal Reserve Chairman Jerome Powell indicated the central bank could begin tapering later this year and raising rates in 2022.

Talk of tapering and interest rate hikes caused investors to sell Treasurys with the yield on the 10-year note rising 8 basis points to 1.41%.

In stocks, financials, including Bank of America Corp. and Goldman Sachs Group Inc., outperformed as the yield curve steepened following signals from the Fed.

Elsewhere, semiconductors Advanced Micro Devices Inc. and Nvidia Corp. gained after the White House said it was looking into ways to solve the chip shortage that is impacting automakers.

In earnings, Darden Restaurants Inc. reported quarterly profit and revenue that exceeded Wall Street forecasts as same-restaurant sales surged 47.5%. The company’s board of directors authorized a new $750 million share buyback program.

Consulting firm Accenture plc posted in-line revenue and raised its sales forecast for the current quarter due to strong demand for its cloud and security services.

BlackBerry shares jumped after the company reported revenue in all units exceeded expectations. While Salesforce led the Dow after boosting revenue targets for 2022.

Costco Wholesale Corp. and Nike Inc. are set to release their quarterly results after the closing bell.

In commodities, West Texas Intermediate crude oil edged up $1.07 to $73.30 a barrel and gold fell $29 to $1,747.70 an ounce.

Overseas markets were higher.

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In Europe, France’s CAC 40 and Germany’s DAX 30 advanced 0.98% and 0.88%, respectively. Britain’s FTSE 100 slipped 0.07% after the Bank of England kept policy on hold and downgraded its growth forecast.

Asian bourses were higher with Hong Kong’s Hang Seng index and China’s Shanghai Composite rallying 0.38% and 1.19%, respectively. Japan’s Nikkei 225 was closed for holiday.

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