Historical Stock Chart
2 Months : From Nov 2019 to Jan 2020
By Karen Langley and Avantika Chilkoti
Stocks rose after the Federal Reserve kept interest rates steady and indicated no intention of raising them soon.
The Fed had been expected to neither raise nor lower its benchmark interest rate, but major stock indexes still edged higher after the rate announcement and an accompanying statement giving an upbeat view of the economy. Stocks continued to rise as Fed Chairman Jerome Powell said at a press conference that he expects the economy to continue growing moderately.
The S&P 500 ended the day up 9.11 points, or 0.3%, at 3141.63. The Nasdaq Composite added 37.87 points, or 0.4%, to 8654.05. The Dow Jones Industrial Average, weighed down by declines in shares of Chevron and Home Depot, reversed early losses to rise 29.58 points, or 0.1%, to 27911.30.
"It just gave more confidence to the market that the Fed is going to be on the sidelines in 2020," said Hank Smith, co-chief investment officer at Haverford Trust.
Investors are in the midst of a busy few days, with the U.S. and European central banks holding policy meetings and providing fresh assessments of economic indicators as well as a general election in the U.K. that could prove to be a turning point for Brexit.
The Fed had cut interest rates at its past three meetings, but officials Wednesday signaled that if their economic outlook holds, rates can remain steady through 2020.
"I do think we're finally at the point where maybe monetary policy will become less of what we need to watch, and instead it will be more focused on the company fundamentals and the fundamentals of the economy, " said Ron Temple, head of U.S. equity at Lazard Asset Management.
The WSJ Dollar Index hit its lowest closing value since July, falling 0.3% to 90.27, after Mr. Powell said the Fed was unlikely to raise rates until it sees a persistent rise in consumer prices. Expectations that rates won't rise reduce the dollar's attractiveness to yield-seeking investors.
Data released Wednesday showed consumer prices rose moderately in November, indicating inflation has remained in check despite low unemployment and the trade conflict with China.
Investors also continued to look for clues on the progress of the U.S.-China trade talks, after the The Wall Street Journal reported Tuesday that new U.S. tariffs on Chinese imports due to go into effect on Dec. 15 may be delayed.
Some analysts remain concerned that existing tariffs imposed on Chinese imports are already starting to hurt the U.S. economy.
"It's going to come home to roost for the one element of the U.S. economy that has always, always, always pulled the economy out of any slump and that's the U.S. consumer," said Matt Cairns, a rates strategist at Rabobank.
Shares of Chevron fell $1.66, or 1.4%, to $116.23 after the oil company wrote down the value of its assets by more than $10 billion and lowered its forecast for commodity prices.
Home Depot slid $3.90, or 1.8%, to $212 after forecasting fiscal 2020 same-store sales below Wall Street expectations. Shares of Children's Place dropped $16.35, or 23%, to $54.31 after the retailer's third-quarter sales missed analysts' estimates and it reduced its revenue forecast. GameStop lost 98 cents, or 15%, to $5.53 after the videogame retailer cut its financial guidance amid worse-than-expected quarterly results.
The yield on the benchmark 10-year Treasury declined to 1.786% from 1.833% Tuesday.
The state-backed oil major Saudi Arabian Oil Co., which was among the most closely watched stocks, gained 10% by the close of trading in Riyadh. That was the upper limit for the stock, which made its debut after the world's largest initial public offering.
Write to Karen Langley at email@example.com and Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
December 11, 2019 17:38 ET (22:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.