US close: Dow extends winning streak following Powell's speech
Wall Street turned in a mostly positive performance on Thursday as market participants digested comments made by Federal Reserve chairman Jerome Powell regarding the central bank's plans for the future of monetary policy in the US and several data releases.
At the close, the Dow Jones Industrial Average was up 0.57% at 28,492.27 and the S&P 500 was 0.17% firmer at 3,484.55, while the Nasdaq Composite saw out the session 0.34% weaker at 11,625.34.
The Dow closed 160.35 points higher on Thursday, extending a rally started in the previous session.
Thursday's main focus was a speech from the Fed's Jerome Powell at the central bank's annual symposium, held virtually this year as opposed to its usual site in Jackson Hole.
Powell stated the Fed had formally agreed to a policy of "average inflation targeting", meaning the central bank would let inflation run "moderately" above its 2% goal for "some time" despite attempting to cap it at that level for several years.
He also acknowledged the importance of a strong labour market, stating it would ensure that US employment doesn't fall below its maximum level.
Bank stocks picked up gains on the announcement, while the yield on the benchmark 10-year Treasury notes climbed to 0.72%.
Also in focus was data from the Labor Department that revealed the number of Americans filing for unemployment benefits fell slightly last week after an unexpected increase the week before.
While initial jobless claims fell by 98,000 week-on-week, they remained above 1.0m in the seven days ended 22 August from the previous week's revised level.
In other macro news, a second reading of the US economy in the second quarter revealed the largest quarterly drop in history.
The Commerce Department said gross domestic product tumbled 31.7% year-on-year as the Covid-19 pandemic wreaked havoc on the nation's economy throughout the quarter. However, the fall was slightly better than initial estimates for a decline of 32.9%.
Elsewhere, pending home sales increased 5.9% month-on-month in July, according to the National Association of Realtors. Annually, sales increased by 15.5%.
Lawrence Yun, the NAR's chief economist, said: "We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market. Home sellers are seeing their homes go under contract in record time, with nine new contracts for every ten new listings."
Lastly, August's Kansas City Fed composite index came in at 14.0, well ahead of consensus estimates for a reading of 2.0 and last month's print of 3.0.
In corporate news, Abbott Laboratories shares were higher in. after the firm secured emergency-use authorisation for its $5 Covid-19 test, while Williams-Sonoma shares were lower despite posting a second-quarter profit beat overnight.