US close: Stocks end higher as traders continue to mull Fed
US stocks ended Thursday’s session higher as the Federal Reserve’s decision to stand pat on interest rates continued to provide a boost to investor sentiment.
The Dow Jones Industrial Average edged up 0.54% to 18,392.46 points, the S&P 500 grew 0.65% to 2,177.18 points and the Nasdaq rose 0.84% to 5,339.52 points.
Oil prices also gained after official data on Wednesday showed a surprise drop in US crude inventories last week. West Texas Intermediate crude increased 1.6% to $46.10 per barrel and Brent rose 1.4% to $47.53 per barrel at 2200 BST.
The Federal Open Market Committee on Wednesday decided to keep interest rates unchanged at between 0.25% and 0.50% and cut the number of rate increases they expect this year from one to two.
The Fed was split in its decision to leave interest rates unchanged with three members dissenting in favour of an immediate 25 basis point hike.
The FOMC also signalled that the case for a hike later this year has strengthened, saying inflation was on track to reach the 2% target and near-term risks were “balanced”.
Goldman Sachs said its US economics team assigns a cumulative 65% probability to a rate hike by the 14 December FOMC meeting, which is roughly the same as implied by fed fund futures.
Meanwhile, Societe Generale said: “The outcome of the September FOMC meeting was in line with our expectations, as the Committee reintroduced the balance of risks statement, removed a rate hike this year and in 2017, and cut the longer-run nominal neutral funds rate.
“In our view, the reintroduction of the balance of the risks statement was a way to bridge the divide between the hawks and doves on the Committee, and it took the Fed a step further towards raising the funds rate in December.”
In economic data, US jobless claims fell for an 81st consecutive week last week. Initial jobless claims dropped by 8,000 to 252,000, the Labor Department said, compared to economists’ estimates of 261,000.
US house price rose 0.5% in July following a 0.2% increase in June, according to the monthly house price index by the Federal Housing Finance Agency. Analysts had expected a 0.3% increase.
Separately, US existing home sales fell 0.9% to an annual rate of 5.33 million units in August, the National Association of Realtors said, compared to forecasts for a 1.1% increase. July’s sales were also revised lower to 5.38 million units from a previously reported 5.39 million.
The Chicago Fed National Activity Index fell to negative 0.55 in August compared with a revised 0.24 in July and forecasts of 0.15.
In corporate news, energy stocks rallied on the increase in oil prices including Transocean Ltd., Murphy Oil Corp., Diamond Offshore Drilling Inc. and ConocoPhillips.
Shares in Bed Bath & Beyond advanced even as the company reported quarterly earnings that fell short of analysts’ estimates.
Red Hat Inc. shares jumped after the software company posted quarterly results late Wednesday that beat forecasts.
Dow Jones - Risers
Procter & Gamble Co. (PG) $88.99 1.36%
Walt Disney Co. (DIS) $93.41 1.10%
United Technologies Corp. (UTX) $102.99 1.02%
Coca-Cola Co. (KO) $42.96 1.01%
Boeing Co. (BA) $131.87 1.00%
Cisco Systems Inc. (CSCO) $31.66 0.96%
Apple Inc. (AAPL) $114.62 0.94%
Verizon Communications Inc. (VZ) $52.35 0.93%
JP Morgan Chase & Co. (JPM) $67.39 0.82%
Unitedhealth Group Inc. (UNH) $141.02 0.81%
Dow Jones - Fallers
Pfizer Inc. (PFE) $34.15 -0.38%
E.I. du Pont de Nemours and Co. (DD) $66.85 -0.22%
Caterpillar Inc. (CAT) $83.50 0.04%
Microsoft Corp. (MSFT) $57.82 0.10%
Wal-Mart Stores Inc. (WMT) $72.27 0.11%
Nike Inc. (NKE) $55.41 0.13%
3M Co. (MMM) $179.85 0.14%
Visa Inc. (V) $83.36 0.17%
Intel Corp. (INTC) $37.55 0.27%
Exxon Mobil Corp. (XOM) $83.54 0.29%
S&P 500 - Risers
Weyerhaeuser Co. (WY) $32.08 5.74%
Transocean Ltd. (RIG) $9.65 5.58%
Frontier Communications Co. (FTR) $4.33 4.84%
Discovery Communications Inc. Class A (DISCA) $25.71 4.81%
Royal Caribbean Cr (RCL) $70.99 4.61%
Murphy Oil Corp. (MUR) $27.55 4.32%
Freeport-McMoRan Inc (FCX) $10.98 4.17%
First Solar Inc. (FSLR) $35.42 4.08%
Discovery Communications Inc. Class C (DISCK) $24.84 4.06%
Red Hat Inc. (RHT) $79.94 3.87%
S&P 500 - Fallers
Equity Residential (EQR) $64.36 -2.50%
Southwestern Energy Co. (SWN) $14.34 -2.32%
Level 3 Communications, Inc. (LVLT) $47.40 -2.09%
Kohls Corp. (KSS) $43.51 -1.87%
Pioneer Natural Resources Co. (PXD) $179.05 -1.84%
Target Corp. (TGT) $68.56 -1.31%
Marathon Petroleum Corporation (MPC) $42.69 -1.20%
International Paper Co. (IP) $47.91 -1.20%
Nordstrom Inc. (JWN) $50.49 -1.14%
J.B. Hunt Transport Services Inc. (JBHT) $79.56 -1.13%
Nasdaq 100 - Risers
Liberty Interactive Corporation QVC Group (QVCA) $19.53 5.11%
Discovery Communications Inc. Class A (DISCA) $25.71 4.81%
Discovery Communications Inc. Class C (DISCK) $24.84 4.06%
Incyte Corp. (INCY) $89.27 2.95%
Alexion Pharmaceuticals Inc. (ALXN) $133.69 2.55%
T-Mobile Us, Inc. (TMUS) $47.03 2.51%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $37.17 2.40%
Walgreens Boots Alliance, Inc. (WBA) $82.38 2.23%
Intuitive Surgical Inc. (ISRG) $718.20 2.15%
Express Scripts Holding Co (ESRX) $71.03 1.98%
Nasdaq 100 - Fallers
Applied Materials Inc. (AMAT) $30.29 -0.92%
Vodafone Group Plc ADS (VOD) $29.63 -0.80%
Seagate Technology Plc (STX) $36.40 -0.79%
Lam Research Corp. (LRCX) $92.69 -0.64%
Viacom Inc. Class B (VIAB) $35.82 -0.64%
Broadcom Limited (AVGO) $168.82 -0.59%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $238.38 -0.57%
KLA-Tencor Corp. (KLAC) $69.51 -0.40%
Micron Technology Inc. (MU) $17.59 -0.40%
Electronic Arts Inc. (EA) $83.17 -0.36%