Wall Street climbs after Fed holds steady on rates

2019-12-12 09:04:43Xinhua Editor : Li Yan ECNS App Download

U.S. equities finished Wednesday's session higher after the Federal Reserve kept interest rates steady and signaled no intention of raising them soon.

The Dow Jones Industrial Average closed up 29.58 points, or 0.11 percent, to 27,911.30. The S&P 500 rose 9.11 points, or 0.29 percent, to 3,141.63. The Nasdaq Composite Index climbed 37.87 points, or 0.44 percent, to 8,654.05.

Eight of the 11 primary S&P 500 sectors ended higher, with both materials and technology up 0.71 percent, leading the advancers. Real estate declined 0.76 percent, becoming the worst-performing group.

"Most of the day was basically kind of flat. People were waiting in anticipation of what the Fed was going to do and more importantly, what the fed was going to say," Peter Tuchman, an experienced trader on the floor of the New York Stock Exchange, told Xinhua.

The Federal Open Market Committee (FOMC), the Fed's policy-making committee, decided to maintain the target range for the federal funds rate at 1.5 percent to 1.75 percent after concluding a two-day policy meeting, in line with market expectations.

"Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate," the Fed said in a statement, adding it will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.

The central bank signaled no immediate appetite for rate hikes, removing the fear of tightening monetary policy among investors, according to some experts.

"The FOMC left interest rates unchanged today with no dissents. The dot plot shows no change in rates next year," Chris Low, chief economist at FHN Financial, commented on the Fed's statement.

"I got the impression that they will stay nimble concerning rate moves depending on how the economy goes forward," said Tuchman, noting Fed Chairman Jerome Powell's comments "were bullish relative to the economy."

"Our economic outlook remains favorable despite global developments and ongoing risks," Powell told reporters at a press conference Wednesday afternoon.

"With our decisions through the course of the past year, we believe that monetary policy is well-positioned to serve the American people," the Fed chair said, adding the current stance of monetary policy "likely will remain appropriate" as long as the U.S. economy stays on track.

The Fed has lowered interest rates three times since July, amid growing risks and uncertainties stemming from trade tensions, weakness in global growth and muted inflation pressures.

Looking ahead, Tuchman said updates about U.S.-China trade and the holiday season are among the focus for investors who are expecting to close out the year at a positive mode.

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