US close: S&P 500 wraps up best January in 32 years, Dow closes lower

At the close, the Dow Jones Industrial was down 0.06% at 24,999.67, while the S&P 500 closed out its best January in 32 years 0.86% higher at 2,704.10 and the Nasdaq traded 1.37% firmer at 7,281.74.

The Dow closed 15 points lower after the Federal Reserve left interest rates on hold at between 2.25% and 2.5% on Wednesday, as expected. Market participants took comfort from the fact that the Fed dropped the phrase "further gradual increases" in relation to rate hikes from its statement.

They also welcomed Powell's patient 'wait-and-see' policy and acknowledgement that the case for higher rates has weakened.

"Only last month the Fed had raised rates and hinted that two more moves could follow this year," said strategists at Rabobank.

"While last night’s change of direction had been heralded by more accommodative comments from various Fed officials in the past few weeks, the abruptness of the change of direction still took the market by the surprise."

Elsewhere, trade talks between the US and China are progressing "well with good intent" but a final deal will have to wait until the American and Chinese presidents meet personally "in the near future", Donald Trump said.

That meeting was needed for him and Xi Jinping to discuss and agree on some of the long-standing and more difficult points, the US President said in remarks posted to his personal account on social media platform Twitter.

In corporate news, Facebook shares surged 10.82% in the session as it posted a record $6.9bn profit for the last three months of 2018, up 61% on the previous year.

Hargreaves Lansdown equity analyst George Salmon said: "Only time will tell if Mark Zuckerberg’s ambitious plans to revolutionise Facebook (will) pay off, but these results will go a long way towards regaining the trust of Wall Street."

General Electric shares closed 11.65% higher as its fourth-quarter revenue topped analysts' expectations.

Microsoft lost 1.83% in the session as its second-quarter revenue missed expectations of $32.51bn, at $32.47bn and electric car maker Tesla dipped 0.57% after its fourth-quarter earnings.

Neil Wilson, chief market analyst at Markets.com, said the results were OK, but the outlook is a little bit dubious.

"Back-to-back quarterly profits will get headlines but one must fear that Musk is rather robbing Peter to pay Paul in order to achieve it and the guidance for 2019 looks very weak.

"Earnings missed expectations despite much better revenues. Operating income steady at $414m, with profits hit by (a) decline in regulatory credits, lower prices in China, higher import duties on parts from China and the introduction of a lower-priced mid-range Model 3."

Elsewhere, Northrop Grumman was down 1.96% and Dow DuPont 9.30% weaker after the release of their quarterly earnings.

On the macro front, more Americans filed for unemployment benefits in the week ended 26 January than they had since September 2017 amid the tail end of the longest government shutdown in US history.

Jobless claims jumped from a 50-year low to 253,000, according to the Labor Department, exceeding all button forecast.

In other news, economic activity in the Chicago area deteriorated by more than expected in January, according to figures released on Thursday.

The MNI Chicago business barometer index fell to a two-year low of 56.7 from a downwardly-adjusted 63.8 in December, missing expectations for a reading of 61.5.

Four out of five of the barometer's sub-components started the year lower, with notable falls in production and new orders contributing to most of the 7.1-point drop in the headline index.

Jai Lakhani, economist at MNI Indicators, said: "The MNI Chicago business barometer had a sluggish start to 2019, pressured by significant drops in both new Orders and production, resulting in the lowest headline reading in two years.

Lastly, new home sales shot up 17% to 657,000 in November, according to the Commerce Department in a report that had been delayed as a result of the 34-day long shutdown.

However, this pace was 7.7% slower than a year ago, with an average price of $302,400 - 12% lower year-on-year.