Stock Market Today: Volatility Picks Up After Powell Comments
Bed Bath & Beyond was one of the biggest movers today as bankruptcy buzz swirled.
Stocks struggled for direction Tuesday as investors took in comments from Federal Reserve Chair Jerome Powell.
The major benchmarks initially shrugged off early weakness to trade higher after Powell took the mic at the Economic Club of Washington D.C. And though the buying power briefly faded as the head of the central bank indicated there was more work to be done to bring down inflation, stocks found their footing by the close.
While Powell began his conversation with Carlyle Group co-founder David Rubenstein by saying that the disinflationary process has begun, he added that the Fed is ultimately data-dependent. "So if we continue to get, for example, strong labor-market reports [like in the January jobs report] or higher inflation reports, it may well be the case that we have to do more," Powell said.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Powell gave a similar message at last Wednesday's Federal Open Market Committee press conference: The disinflation process has begun," says Zhiwei Ren, portfolio manager at Penn Mutual Asset Management. "It is still early in the process, and the Fed wants to see lower inflation out of core service ex-housing sectors. Low inflation is likely to come with a higher unemployment rate." Overall, Ren says, the Fed chair's message was "fairly balanced."
Although Powell's comments sparked volatility in afternoon trading, the major benchmarks eventually stabilized to close higher on the day. The Dow Jones Industrial Average added 0.8% to 34,156, the S&P 500 gained 1.3% to 4,164, and the Nasdaq Composite rose 1.9% to 12,113.
Bed Bath & Beyond Gets Crushed
Fed Chair Powell's interview with David Rubenstein was the marquee event of the day, but there was plenty of single-stock news for investors to sift through as well. Most notably, Bed Bath & Beyond (BBBY) said that it will sell preferred stock and warrants in an effort to raise cash and avoid bankruptcy. The embattled homegoods retailer has reportedly secured commitments to raise more than $1 billion from the sale.
"Unfortunately, we see a low probability that the company will be able to raise equity and view this as a 'last gasp' before filing for bankruptcy protection," says Wedbush analyst Seth Basham, who has an Underperform (Sell) rating on BBBY. Wall Street was also less than impressed with the news, sending the retail stock down 48.6% in today's trading. "In the event the transactions are successful, BBBY common shares could rise as they are trading like options on the company's survival, but the ultimate value would be undermined by this highly dilutive offering of preferred stock that would have priority over the common shares."
-
Ask the Editor: Itemized DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on itemized deductions claimed on Schedule A of Form 1040
-
9 Types of Insurance You Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
Are You Putting Yourself Last? The Cost Could Be Your RetirementIf you're part of the sandwich generation, it's critical that you don't let the needs of your aging parents come at the expense of your future.
-
Cooler Inflation Supports a Relief Rally: Stock Market TodayInvestors, traders and speculators welcome much-better-than-hoped-for core CPI data on top of optimism-renewing AI earnings.
-
The November CPI Report Is Out. Here's What It Means for Rising PricesThe November CPI report came in lighter than expected, but the delayed data give an incomplete picture of inflation, say economists.
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market TodayInvestors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
The Delayed November Jobs Report Is Out. Here's What It Means for the Fed and Rate CutsThe November jobs report came in higher than expected, although it still shows plenty of signs of weakness in the labor market.
-
Stocks Struggle Ahead of November Jobs Report: Stock Market TodayOracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
