US open: Stocks mixed after FOMC rate decision

US stocks were mixed on Thursday as traders continued to weigh the Federal Reserve’s policy announcement from the previous session.

At 1554 GMT, the Dow Jones Industrial Average rose 0.56%, the S&P 500 increased 0.36% but the Nasdaq fell 0.16%.

On Wednesday, the Federal Reserve left the target range for the benchmark federal funds rate unchanged at 0.25% to 0.5%, as widely expected, but the accompanying statement was less hawkish than anticipated.

The Fed, which lifted interest rates for the first time in nearly a decade back in December, now expects two rate rises in 2016, down from the four projected at the end of last year.

"Proceeding cautiously will allow us to verify that the labour market is continue to strength given the economic risk from abroad," said chairwoman Janet Yellen.

"Such caution is appropriate given short term interest rates are still near zero, which means monetary policy has greater scope to respond to upside than downside changes in the outlook," she said.

The US central bank said that although the labour market was improving, it was still looking for inflation to reach its 2% target and reckoned the economy would continue to expand at a moderate pace.

Societe Generale now expects one rate hike in 2016.

In economic data, initial jobless claims rose to 265,000 in the week to 12 March from 258,000 the previous week, the Labor Department revealed. Analysts had penciled in 268,000 claims.

Manufacturing conditions in the Philadelphia region improved far more than expected in March, turning positive for the first time in seven months, according to the latest report from the Federal Reserve Bank of Philadelphia.

The diffusion index rose from a reading of -2.8 in February to 12.4, by far exceeding economists’ expectations for a reading of -1.7.

Oil prices were in the black with West Texas Intermediate up 3.5% at $39.88 a barrel and Brent crude 2.4% firmer at $41.37.

In corporate news, shares in FedEx surged after its third-quarter results released late on Wednesday came in better than expected.

Office Depot rallied after The New York Post said Amazon.com might bid for its corporate business unit.

In currencies, the dollar was 1.57% weaker against the pound, 0.88% lower versus the euro and 1.15% weaker against the yen.