US close: Shares slightly higher as Fed signals rate rise

US shares closed in positive territory on Wednesday as the Federal Reserve left interest rates unchanged, but forecast higher inflation this year, signalling a possible move on benchmark rates at its next meeting in March.

The Dow Jones Industrial Average, having been more than 250 points higher, slipped lower after the Fed announcement but rebounded slightly before the close to finish 72 points higher at 26,149. The S&P 500 was up 1.38% to 2,823 points and the Nasdaq rose 9 points to 7,411.

The Dow was lifted by better-than-expected earnings from Boeing. Healthcare stocks spent another day in the sick bay after Tuesday's announcement from Amazon, JP Morgan and Berkshire Hathaway that they were joining forces to provide employee sickness benefits at lower cost.

In her final policy meeting, Fed Chair Janet Yellen and the rest of the Federal Open Market Committee voted unanimously to leave the benchmark federal funds rate in a range of 1.25%-1.5%.

“Inflation on a 12-month basis is expected to move up this year and to stabilize around the FOMC’s 2% objective over the medium term,” the FOMC said in a statement.

Boeing announced on Wednesday that it was on track to deliver as many as 815 new commercial aircraft in 2018, almost 7% over the industry-record 763 it manufactured a year earlier.

The firm forecast an operating cash flow for its current trading year of nearly $15bn, compared to the $13.34bn it collected in 2017, boosting earnings per share to $4.80 from $2.47.

Shares in AT&T rose as the company's final quarter numbers beat forecasts, reporting net attributable income of $19bn , or $3.08 a share, in the quarter, compared with $2.4bn, or 39 cents a share, a year earlier.

Facebook shares fell in after-market trading despite posting better-than-expected fourth quarter earnings but chief executive Mark Zuckerberg said a decision to host fewer viral videos "to make sure people's time is well spent" cut user time on the social media platform by roughly 50 million hours daily.

Microsoft fell as the software giant reported a quarterly loss due to the recent tax cuts introduced by President Donald Trump.

The company made a second-quarter loss of 82 cents a share against a profit of 80 cents a year earlier, including a net charge of $13.8bn related to the tax cuts. Revenue rose to $28.92bn from $28.28bn.

With the non-farm payrolls report due at the end of the week, all eyes were on the latest ADP employment report, which showed private sector employment in the US grew in January.

Employers added 234,000 jobs, beating expectations for a 185,000 increase. Meanwhile, private payrolls gains for December were revised down to 242,000 from 250,000.

Meanwhile, the Chicago purchasing managers’ index slipped less than expected in January. The PMI fell to 65.7 from a revised 67.8 in December, beating expectations for a reading of 64.1.

Elsewhere, data from the National Association of Realtors showed US pending home sales rose 0.5% in December to a reading of 110.1, marking their highest level since March and surpassing expectations of a 0.4% increase.

Dow Jones - Risers

Boeing Co. (BA) $354.59 4.04%
Microsoft Corp. (MSFT) $94.92 2.35%
Nike Inc. (NKE) $68.29 1.47%
United Technologies Corp. (UTX) $138.09 1.16%
Travelers Company Inc. (TRV) $149.69 0.65%
Exxon Mobil Corp. (XOM) $87.33 0.64%
Visa Inc. (V) $124.22 0.54%
Coca-Cola Co. (KO) $47.67 0.53%
Unitedhealth Group Inc. (UNH) $237.53 0.37%
Verizon Communications Inc. (VZ) $54.08 0.33%

Dow Jones - Fallers

Johnson & Johnson (JNJ) $138.85 -3.36%
Walt Disney Co. (DIS) $108.90 -2.37%
Chevron Corp. (CVX) $125.51 -2.31%
International Business Machines Corp. (IBM) $163.61 -1.91%
Home Depot Inc. (HD) $201.05 -1.89%
Cisco Systems Inc. (CSCO) $41.46 -1.87%
Merck & Co. Inc. (MRK) $59.54 -1.83%
Goldman Sachs Group Inc. (GS) $267.86 -1.70%
Pfizer Inc. (PFE) $37.20 -1.59%
Intel Corp. (INTC) $48.10 -1.41%

S&P 500 - Risers

Pitney Bowes Inc. (PBI) $14.31 13.35%
Harris Corp. (HRS) $158.98 8.01%
Electronic Arts Inc. (EA) $127.00 6.99%
Xerox Corp. (XRX) $34.40 5.20%
Micron Technology Inc. (MU) $43.76 5.03%
Thermo Fisher Scientific Inc. (TMO) $224.13 4.27%
Boeing Co. (BA) $354.59 4.04%
Stericycle Inc. (SRCL) $75.36 4.00%
Equinix, Inc. (EQIX) $455.34 3.59%
Activision Blizzard Inc. (ATVI) $74.14 3.53%

S&P 500 - Fallers

Harley-Davidson Inc. (HOG) $48.31 -12.62%
Chesapeake Energy Corp. (CHK) $3.52 -9.41%
Corning Inc. (GLW) $31.26 -8.73%
Juniper Networks Inc. (JNPR) $26.23 -7.92%
AbbVie Inc (ABBV) $112.67 -7.88%
CIGNA Corp. (CI) $210.18 -6.13%
Franklin Resources Inc. (BEN) $42.49 -5.83%
CVS Health Corp (CVS) $78.92 -5.63%
TEGNA Inc (TGNA) $14.50 -5.54%
Ameriprise Financial Inc. (AMP) $168.71 -4.93%

Nasdaq 100 - Risers

Take-Two Interactive Software Inc. (TTWO) $126.79 7.17%
Electronic Arts Inc. (EA) $127.00 6.99%
Micron Technology Inc. (MU) $43.76 5.03%
Activision Blizzard Inc. (ATVI) $74.14 3.53%
American Airlines Group (AAL) $54.25 3.16%
Broadcom Limited (AVGO) $248.15 2.98%
Symantec Corp. (SYMC) $27.25 2.37%
Western Digital Corp. (WDC) $89.13 2.35%
Microsoft Corp. (MSFT) $94.92 2.35%
Automatic Data Processing Inc. (ADP) $123.61 2.32%

Nasdaq 100 - Fallers

Twenty-First Century Fox Inc Class A (FOXA) $36.92 -4.02%
Gilead Sciences Inc. (GILD) $83.82 -3.97%
Illumina Inc. (ILMN) $231.89 -3.85%
Twenty-First Century Fox Inc Class B (FOX) $36.49 -3.67%
Wynn Resorts Ltd. (WYNN) $165.50 -3.44%
Regeneron Pharmaceuticals Inc. (REGN) $366.73 -3.43%
Align Technology Inc. (ALGN) $261.46 -3.19%
Netflix Inc. (NFLX) $270.00 -3.16%
Henry Schein Inc. (HSIC) $75.76 -2.96%
Shire Plc Ads (SHPG) $140.30 -2.86%