Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
US Stocks Rise After Fed Remarks       06/19 16:10

   Stocks brushed off a muted start on Wall Street and notched modest gains 
Wednesday after the Federal Reserve reaffirmed that it is prepared to cut 
interest rates if needed to shield the U.S. economy from trade conflicts or 
other threats.




   (AP) -- Stocks brushed off a muted start on Wall Street and notched modest 
gains Wednesday after the Federal Reserve reaffirmed that it is prepared to cut 
interest rates if needed to shield the U.S. economy from trade conflicts or 
other threats.

   In a widely expected move, the central bank's policymakers decided to leave 
the Fed's benchmark interest rate unchanged. Still, by signaling the 
possibility of lower rates, the Fed reassured investors who have been worried 
that the trade war between Washington and Beijing could weigh on global 
economic growth, and by extension, corporate profits.

   The reaction to the Fed's midafternoon statement was more pronounced in the 
bond market, where the yield on the 10-year Treasury note slid to 2.03%, its 
lowest level since November 2016. The move signals that bond traders see an 
increased likelihood that the Fed will lower rates. Investors are betting on at 
least one interest rate cut this year, possibly as early as July.

   "The story of the last six months is equities are comforted when they 
believe that the Fed is going to be supportive and going to provide offsets to 
some of the policy uncertainties that are out there," said Willie Delwiche, 
investment strategist at Baird.

   The latest gain extended the market's winning streak to a third day, adding 
to a June rebound in stocks after a dismal sell-off in May.

   The S&P 500 rose 8.71 points, or 0.3%, to 2,926.46. The broad market index 
is within striking range of its all-time high, set on April 30.

   The Dow Jones Industrial Average gained 38.46 points, or 0.1%, to 26,504. 
The Nasdaq composite added 33.44 points, or 0.4%, to 7,987.32. The Russell 2000 
index of smaller companies picked up 5.35 points, or 0.3%, to 1,555.58.

   Major stock indexes in Europe finished mixed. 

   U.S. stock indexes spent much of the day wavering between small gains and 
losses as investors waited for the Fed to deliver its update on interest rates 
following a two-day meeting of policymakers.

   The Fed left its key interest rate, which influences many consumer and 
business loans, unchanged Wednesday in a range of 2.25% to 2.5%. That's where 
it's been since December.

   The central bank also said that because "uncertainties" have increased, it 
would "act as appropriate to sustain the expansion." That language echoed a 
remark that Chairman Jerome Powell made two weeks ago that many investors 
interpreted as a signal that rate cuts were on the way, triggering a rally on 
Wall Street.

   The Fed also removed a reference to being "patient" about adjusting rates. 
That suggests that the central bank is now inclined to begin cutting rates for 
the first time in more than a decade to help stabilize the economy.

   "They don't want to overreact to one data point here or one data point 
there," Delwiche said. "They're trying to establish what is the trend in the 
economy and the degree to which economic conditions have actually deteriorated 
before making a move."

   Most analysts say they think economic growth has slowed sharply in the 
April-June quarter to around a 1.5% percent annual rate, only half the pace of 
the past year.

   The Fed's statement came a day after the head of the European Central Bank 
said it was ready to cut interest rates and provide additional economic 
stimulus if necessary.

   The biggest issue looming over the market remains the U.S. trade war with 
China. Stocks opened the week higher and rallied on Tuesday after President 
Donald Trump said he plans to meet with China's president at the end of the 
month to discuss their ongoing trade war. The announcement injected some hope 
into a market that has been volatile because of concerns over the lingering 
trade dispute and its potential impact on economic growth.

   The market has rallied in the past and then dipped again because of 
seemingly good news on trade talks that did not result in any concrete progress.

   Health care stocks drove much of the market's gains Wednesday. Allergan 
climbed 6.2% and UnitedHealth Group rose 1.8%.

   Technology stocks rose, with software maker Adobe leading the way with a 
5.2% gain on solid profit results. Household goods makers also notched gains. 
Kraft Heinz added 2.3%.

   Utilities, which tend to rise when bond yields decline, also rose. Edison 
International gained 2.8%.

   Financial companies, including banks, were the biggest laggards. The sector 
is sensitive to the moves in the bond market. Lower bond yields pull down the 
interest rates that banks charge on loans. Synchrony Financial dropped 1.7%.

   The 10-year Treasury yield has been declining steadily since hitting a high 
of 3.23% last November. It fell to 2.03% Wednesday, down from 2.06% late 
Tuesday.

   Benchmark crude oil fell 0.3% to settle at $53.76 a barrel. Brent crude oil, 
the international standard, fell 0.5% to close at $61.82 a barrel. Wholesale 
gasoline rose 0.8% to $1.74 per gallon. Heating oil climbed 0.1% to $1.83 per 
gallon. Natural gas fell 2.2% to $2.28 per 1,000 cubic feet.

   Gold edged down 0.1% to $1,348.80 per ounce, silver fell 0.2% to $14.96 per 
ounce and copper fell 0.8% to $2.68 per pound.

   The dollar fell to 107.97 Japanese yen from 108.44 yen on Friday. The euro 
rose to $1.1245 from $1.1196. 


(CZ)

 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN