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Wall Street Stages Modest Bounce at Open After ADP, Powell News; Dow up 210 Pts -Breaking

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© Reuters.

Geoffrey Smith 

Investing.com — The U.S. stock market opened on Wednesday with a slight bounce, recovering around one-third of the losses they suffered on Tuesday due to Ukraine’s war. 

Fears about Russian exports preventing a stronger rebound prevented an even more powerful recovery. It is possible that this could increase an already severe inflationary trend, particularly in the U.S.

In prepared remarks, Powell reiterated to Congress that the inflation rate is far too high. He also stated that it is likely to stay above target longer than originally thought. Accordingly, Powell reiterated his previous guidance and said that this month would see the Fed begin selling its bond portfolio. Powell stated that it was premature to assess the long-term effects of Russia’s invasion on America’s economy and West’s reaction to it.

James Bullard (St. Louis Fed President) was more direct, stating that the Fed must tighten its policy quickly and that it will have a smaller impact on American economy than Europe.

The index was at 9:40 ET (1440 GMT) and had risen 210 points or 0.6% to 33,505 point. It was also up 0.8%, 0.4%, and 0.8% by the time of this writing.

There was new evidence earlier that the U.S. labor force is recovering from the Covid-19 winter wave. Payrolls processor reported that 470,000 people had been hired in February by the private sector. This was 100,000 more than what we expected. ADP also revised the month-ago figure by converting a initial estimate of -301,000 into +150,000,000. This revision will likely further undermine the credibility of the indicator, which was once considered a reliable guide for employment trends.

Ford Motor (NYSE) is one of the most prominent early mover after it revealed that its legacy automotive division will be separated from its new electric vehicle business in order to maximize value. Ford announced that it will increase EV spend by $20 billion in the next five year, from $20 billion to $50 billion. This is to regain market share from previous movers, such as Tesla (NASDAQ). Ford stock rose 6.7% after it lost 25% of its value in January. 

Nordstrom (NYSE) surged 34% in other markets after the troubled departmental store chain said that it would be able pay shareholders cash back during its current quarter. 

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