US close: Stocks extend gains following Fed interest rate decision

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Wall Street stocks closed higher on Thursday after the Federal Reserve Bank enacted its second 0.75 percentage point interest rate hike overnight as part of an effort to ease rampant inflation without bringing about a recession.

At the close, the Dow Jones Industrial Average was up 1.03% at 32,529.63, while the S&P 500 was 1.21% weaker at 4,072.43 and the Nasdaq Composite saw out the session 1.08% softer at 12,162.59.

The Dow closed 332.04 points lower on Thursday, extending gains recorded in the previous session.

The Federal Reserve's decision to raise its benchmark interest overnight borrowing rate up to a range of 2.25-2.5% still drew a chunk of investor attention after the opening bell, with its moves in June and July representing the bank's most stringent consecutive actions since it began using the overnight funds rate as its principal method of monetary policy back in the early 1990s.

Earnings were also firmly in focus, with Southwest Airlines reporting a record quarter thanks to gains from fuel hedging, Stanley Black & Decker shares slumping after posting an earnings miss and slashing full-year guidance, and Carlyle Group delivering a 34% increase in second-quarter earnings thanks to strong asset sales.

Merck & Co topped estimates on higher-than-expected Q2 earnings and revenues, Comcast revealed it hadn't added any broadband customers in the quarter, Honeywell earnings rose on the back of a rebound in travel demand and office working, while Pfizer quarterly sales surged to a record high.

MoneyGram posted second-quarter earnings and revenues that surpassed estimates and MasterCard shares traded higher after topping expectations with earnings amid 'robust' spending throughout the quarter.

On the macro front, America's economy shrank unexpectedly over the three months ended 30 June, according to the Department of Commerce, which said US gross domestic product dropped at a quarterly annualised pace of 0.9% during the second quarter. Consensus had been for growth of 0.5%.

Elsewhere, Americans filed first-time unemployment claims at a slightly slower pace in the week ended 23 July, dropping by 5,000 to 265,000, according to the Department of Labor. The initial jobless claims print fell short of expectations for a drop to 253,000. On a non-seasonally adjusted basis, claims fell by 42,417 week-on-week to 216,469, with notable decreases in Massachusetts, New York, and South Carolina.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Nike Inc. (NKE) $112.23 4.05%
Microsoft Corp. (MSFT) $276.41 2.85%
Walmart Inc. (WMT) $129.75 2.50%
Cisco Systems Inc. (CSCO) $45.62 2.20%
Boeing Co. (BA) $159.09 1.92%
McDonald's Corp. (MCD) $263.46 1.77%
Coca-Cola Co. (KO) $64.06 1.67%
Procter & Gamble Co. (PG) $148.06 1.66%
Verizon Communications Inc. (VZ) $45.55 1.43%
Goldman Sachs Group Inc. (GS) $329.11 1.41%