Market News U.S. stocks rose on Wednesday, with the S&P 500 ending at a record after the Federal Reserve hinted at a slightly faster pace of interest-rate increases starting next year but suggested rates in the long run would be lower than it had indicated previously. The benchmark S&P 500 set intraday and closing record highs while the CBOE Volatility Index, the VIX, Wall Streets fear gauge, fell to its lowest since February 2007. Its onwards and upwards for equities, especially after the Feds announcements today, said Mike Arone, chief investment strategist for State Street Global Advisors intermediary business in Boston. There is an improved labor environment and inflation that is still below what the Fed considers a normal level, Arone said. I think that environment shapes up very well for risk assets and equities in particular. After a two-day policy meeting, the U.S. central bank slashed its forecast for U.S. economic growth this year to a range of between 2.1 percent and 2.3 percent from an earlier projection of around 2.9 percent. But the Feds forecasts for 2015 and 2016 were unchanged, and it expressed confidence that the recovery was on track. Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace, Fed Chair Janet Yellen told a news conference. The economy is continuing to make progress towards our objectives of full employment and 2 percent inflation. As widely expected, the Fed pushed ahead with plans to wind down one of its main stimulus programs, reducing its monthly bond purchases to $35 billion from $45 billion. The Dow Jones industrial average rose 98.13 points or 0.58 percent, to end at 16,906.62. The S&P 500 gained 14.99 points or 0.77 percent, to 1,956.98, a record closing high. The Nasdaq Composite added 25.60 points or 0.59 percent, to 4,362.84. Wednesdays advance pushed the S&P 500 above its previous record closing high of 1,951.27, which was set on June 9. The S&P 500 index has gained 1.1 percent for the week as investors largely shrugged off mounting tensions in Iraq and focused on a flurry of merger and acquisition activity as well as on better-than-anticipated manufacturing data. The VIX slid 12 percent to close at 10.61, its lowest in more than seven years. Part of the drop was because of options contract expirations on Friday. Amazon Inc shares jumped 2.7 percent to $334.38 after Chief Executive Officer Jeff Bezos unveiled a Fire smartphone with free, unlimited photo storage, jumping into a crowded field dominated by Apple Inc and Samsung Electronics. Volume was around 5.94 billion shares on U.S. exchanges, above last months average of about 5.76 billion, according to data from BATS Global Markets.
Posted on: Thu, 19 Jun 2014 14:33:54 +0000
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