U.S. stocks closed mixed Thursday as investors digested the Federal Reserve’s rate hike decision and Fed Chair Janet Yellen’s press conference. ()
The Dow Jones industrial average and S&P 500 closed lower, while the Nasdaq Composite eked out mild gains. The major indices gave back an intraday spike of more than 1 percent, amid Yellen’s press conference.
Stocks initially fluctuated between slight gains and losses in the minutes after the Fed statement showed the central bank kept
“I think the stock market would like the Fed to have a statement with a vote of confidence in the U.S. economy. I think they were a little surprised. I think the stock market is a little confused right now. I don’t think this statement removed much uncertainty,” said John Bredemus, vice president, Allianz Investment Management. “I think the uncertainty is around whether the U.S. economy can continue to grow given the weakness in the global economy.”
It’s “yet another Fed meeting and another punt. Investors will have to deal with the uncertainty of when a rate hike is going to occur,” said Mike Baele, senior portfolio manager at the Private Client Reserve at U.S. Bank.
The Dow closed down 65 points after rising as much as 193.48 points in late afternoon trade.
The S&P 500 failed hold above the 2,000-level after hitting it in the hour before the statement release, the first touch since Aug. 21. Some analysts had expected the Fed would raise rates if the S&P topped 2,000.
“Really what happens tomorrow will be critical of what the market thinks the Fed said today,” said Lance Roberts, head of Streettalklive.com
“The statement—it brings back to the stock market’s mind what caused the stock market to drop precipitously in the last few weeks,” said David O’Malley, CEO of Penn Mutual Asset Management. The “biggest concern is there is more uncertainty, volatility, that’s going to come from the pressure in emerging markets.”
Utilities closed up 1.3 percent, after briefly jumping more than 2.5 percent, to lead gains on the S&P 500, while financials was the greatest laggard. Regional banks plunged 2 percent.
Treasury yields extended losses, with theat 2.19 percent.
Thefell to 0.68 percent, wiping out its gains for the week. The yield held above 0.80 percent prior to the statement release and began falling in the minutes leading into the release.
“Despite all the hoopla (the Fed’s) really being status quo and Janet Yellen has been referencing that in the press conference that’s she’s holding,” said Myles Clouston, senior director at Nasdaq.
“Unless China takes another leg down the market does seem to be handling it a lot better than it had been when there was a lot of panic and fear driving the (U.S.) market,” he said.
In contrast with the U.S. Fed’s trajectory towards tightening, major central banks around the world are in easing mode as global growth remains sluggish.
The Federal Open Market Committee concluded a highly anticipated two-day meeting Thursday afternoon. Fed Chair Yellen reiterated at the subsequent press conference that the path of a rate hike is more important than the timing of the first one.
Going into the meeting, Wall Street was split over whether the Fed would move Thursday. Forty-nine percent of financial expertsexpected the Fed to raise rates this month. A hike would have been the first one since 2006.
Crude settled down 25 cents at $46.90 a barrel after surging 5.7 percent Wednesday.
OPEC forecasts oil prices will grow by no more than $5 per barrel a year to reach $80 by 2020, according to OPEC sources.
Gold futures settled up $2.00 at $1,117.00 an ounce.
The U.S. dollar traded about one percent lower against major world currencies, with the euro topping $1.14 and the yen near 120.00 yen against the greenback.