US close: Wall Street little moved by less hawkish Fed
Wall Street's main equity indices finished the session in the red despite the considerably less-hawkish policy stance announced by the US central bank on Wednesday.
The Dow Jones Industrials Average slipped into the red following the Fed's policy announcement, losing 0.20% or 34.65 points to finish the session at 17,640.17, while the S&P 500 lost 0.18% or 3.82 points to close at 2,071.50 and the Nasdaq Composite erased 0.18% or 8.62 points to 4,834.93.
As had been widely anticipated, the Federal Reserve kept all its main policy settings unchanged.
However, in their Summary of Economic Projections Fed board members and regional Fed chiefs said they now expected the Fed funds rate to end 2018 at just 2.4%, well down from their March projection of 3.0%.
Forecasts for economic growth on the other hand were little changed.
Similarly, six Fed officials now saw just one more interest rate hike as appropriate in the remainder of 2016, versus just one who believed so in March.
All told, the new projections from the Fed's own officials marked a significant reduction in the gap between their own expectations and those derived from financial markets, although markets may be holding out for even more of the same.
"In other words, the Fed has become even more ‘gradual’ in its hiking plans beyond this year. All’n all it seems that the Employment Report for May has dealt a serious blow to the Fed’s confidence in the ability of the US economy to maintain momentum in face of global headwinds. Hence a shallower rate path is needed," Rabobank's Philip Marey said in a research note sent to clients.
Ahead of the policy announcement, data from the Fed showed industrial production shrank 0.4% month-on-month in May after a revised 0.6% increase in April. The decline was in line with economists’ expectations.
Manufacturing fell 0.4% in May driven by a sharp 4.2% decline in output of autos and auto parts. Analysts had expected a 0.1% fall last month compared to a 0.2% gain.
The Labor Department said US producer prices rose 0.4% in May against expectations for a 0.3% gain as an increase in fuel costs pushed wholesale inflation higher.
Oil prices have rebounded in the past few months.
However, oil prices were sitting lower on Thursday on worries about the global supply glut, especially given signs of recovering Canadian oil exports.
West Texas Intermediate crude oil futures retreated 2.06% to finish the session at $47.49 per barrel on the NYMEX.
That was despite weekly EIA inventory data showing a moderate drawdown in US crude oil inventories of 900,000 barrels, but alongside a large 2.6m barrel drop in gasoline inventories.
Elsewhere, China’s banks extended 985.5bn yuan in new yuan loans in May, exceeding analysts' expectations of 750bn yuan and well above the previous month's levels of 555.6bn yuan.
The move came as the central bank has pledged to keep policy accommodative to support the slowing economy.
In corporate news, shares in restaurant chain operator Bob Evans Farms were sharply lower after its financial forecasts missed analysts’ expectations.
Jabil Circuit was due to report third-quarter earnings after the closing bell.
S&P 500 - Risers
United States Steel Corp. (X) $17.64 +7.96%
Freeport-McMoRan Inc (FCX) $11.00 +7.74%
Alcoa Inc. (AA) $9.45 +3.85%
Ralph Lauren Corp (RL) $94.56 +3.50%
PVH Corp. (PVH) $97.38 +3.18%
Newmont Mining Corp. (NEM) $36.24 +3.10%
Host Hotels & Resorts Inc. (HST) $15.98 +2.83%
Williams Companies Inc. (WMB) $21.77 +2.79%
Mead Johnson Nutrition Co. (MJN) $84.85 +2.72%
Hewlett Packard Enterprise (HPE) $18.80 +2.68%
S&P 500 - Fallers
Perrigo Company plc (PRGO) $98.19 -9.19%
Whole Foods Market Inc. (WFM) $30.92 -4.92%
Edwards Lifesciences Corp. (EW) $97.85 -3.07%
Transocean Ltd. (RIG) $10.88 -2.33%
Allergan plc (AGN) $239.14 -2.03%
NRG Energy Inc. (NRG) $13.95 -1.97%
Csra Inc. (CSRA) $23.17 -1.86%
Endo International Plc (ENDP) $16.82 -1.81%
Cerner Corp. (CERN) $54.51 -1.78%
SCANA Corp. (SCG) $71.02 -1.70%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $126.53 +1.03%
American Express Co. (AXP) $61.42 +0.57%
General Electric Co. (GE) $30.59 +0.49%
Nike Inc. (NKE) $54.31 +0.35%
Caterpillar Inc. (CAT) $75.07 +0.28%
Wal-Mart Stores Inc. (WMT) $71.12 +0.24%
3M Co. (MMM) $167.80 +0.11%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $31.61 -1.65%
Cisco Systems Inc. (CSCO) $28.65 -1.07%
Travelers Company Inc. (TRV) $111.81 -0.66%
United Technologies Corp. (UTX) $100.54 -0.64%
Chevron Corp. (CVX) $100.63 -0.64%
Johnson & Johnson (JNJ) $116.41 -0.61%
Pfizer Inc. (PFE) $34.79 -0.57%
Visa Inc. (V) $78.17 -0.51%
Procter & Gamble Co. (PG) $82.95 -0.48%
Unitedhealth Group Inc. (UNH) $137.26 -0.44%
Nasdaq 100 - Risers
Biomarin Pharmaceutical Inc. (BMRN) $84.01 +3.65%
Viacom Inc. Class B (VIAB) $42.20 +2.40%
Autodesk Inc. (ADSK) $56.61 +1.62%
Liberty Global plc Series A (LBTYA) $35.35 +1.55%
Liberty Global plc Series C (LBTYK) $34.50 +1.50%
Mattel Inc. (MAT) $31.56 +1.48%
Tesla Motors Inc (TSLA) $217.70 +1.27%
Symantec Corp. (SYMC) $19.00 +1.23%
Akamai Technologies Inc. (AKAM) $53.27 +1.16%
Dollar Tree Inc (DLTR) $91.05 +1.11%
Nasdaq 100 - Fallers
Whole Foods Market Inc. (WFM) $30.92 -4.92%
JD.com, Inc. (JD) $20.17 -3.49%
Ctrip.Com International Ltd. Ads (CTRP) $39.25 -2.14%
Endo International Plc (ENDP) $16.82 -1.81%
Cerner Corp. (CERN) $54.51 -1.78%
Intel Corp. (INTC) $31.61 -1.65%
T-Mobile Us, Inc. (TMUS) $41.66 -1.63%
Cognizant Technology Solutions Corp. (CTSH) $59.63 -1.60%
Nxp Semiconductors Nv (NXPI) $85.99 -1.58%
Walgreens Boots Alliance, Inc. (WBA) $83.21 -1.34%