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Aircraft industry

Market Volatility Continues as Investors Await Fed's Interest Rate Decision

Strategic Insights

— 2 min read

The stock market experienced a moderate trading day on Wednesday, with a rally that was largely driven by defense stocks and companies involved in the acquisition of Grumman by Martin Marietta. The Dow Jones industrial average rose 23.92 points to 3,856.22, while the Standard & Poor's 500 index gained 2.17 points to 466.91. Despite the rally, both indexes still trail their January peaks, with the Dow off 122 points from its high and the S&P 500 15 points off its February peak. Analysts are predicting a potential 10% correction in the market over the next few weeks or months, which would push the Dow below 3,600 and the S&P 500 to around 434.

Key Takeaways:

  • The Dow Jones industrial average rose 23.92 points to 3,856.22, and the Standard & Poor's 500 index gained 2.17 points to 466.91, driven by defense stocks and companies involved in the acquisition of Grumman.
  • Despite the rally, both indexes still trail their January peaks, with the Dow off 122 points from its high and the S&P 500 15 points off its February peak.
  • Analysts predict a potential 10% correction in the market over the next few weeks or months, which would push the Dow below 3,600 and the S&P 500 to around 434.
  • The Nasdaq composite index rose 4.50 points to 795.05, driven by the introduction of Intel's new Pentium microprocessor, which is said to be 50% faster than earlier versions.
  • The American Stock Exchange market value index rose 2.58 points to 469.06, while the New York Stock Exchange composite index gained 1.37 points to 259.07 on relatively light volume.
  • Advancing stocks outnumbered declining stocks by 1,443 to 762, with Intel being the most active stock, with volume of 7.2 million shares, after closing up 1 5/8 at 71 1/4.
  • The market is now focused on the Federal Reserve's policy-making committee meeting on March 22 to consider interest rate changes, with traders and investors demanding higher short-term interest rates to fight inflation despite little evidence of rising prices.
  • The January consumer credit numbers report revealed low-inflation views, but these may be discounted by the market due to harsh winter weather and a major earthquake disrupting California's economy.

Statistics:

  • The Dow Jones industrial average rose 23.92 points to 3,856.22.
  • The Standard & Poor's 500 index gained 2.17 points to 466.91.
  • The Nasdaq composite index rose 4.50 points to 795.05.
  • The American Stock Exchange market value index rose 2.58 points to 469.06.
  • Advancing stocks outnumbered declining stocks by 1,443 to 762.
  • Intel's new Pentium microprocessor is said to be 50% faster than earlier versions.
  • The Dow is off 122 points from its January peak of 3,978.36.
  • The S&P 500 is 15 points off its February peak of 482.

Sources:

  • Wedbush Morgan Securities in Los Angeles, via David D. Holt, vice president for research and strategy.

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