Symbol	Name	Price		Change	%Change
DJIA	Dow Industrials	19792.53		-118.68	-0.60%
S& P 500	S& P 500 Index	2253.28		-18.44	-0.81%
NASDAQ	NASDAQ Composite	5436.67		-27.16	-0.50%

 

Stocks close lower after Fed raises rates, eyes three hikes in 2017 energy and utilities drop 2%

Stocks close lower after Fed raises rates, eyes three hikes in 2017 energy and utilities drop 2%

U.S. stocks fell in choppy trade Wednesday, led lower by energy and utilities, after the Federal Reserve raise rates for the second time in a decade.

The Dow Jones industrial average closed about 120 points lower after dropping more than 150 points following the Fed' s announcement, with Caterpillar, 3M and Boeing contributing the most losses. The blue-chips index also hit a new intraday high earlier in the session. 500 dropped about 0.8, with utilities and energy falling around 2 percent. The Nasdaq composite slipped 0.5 percent.

" I think it' s all about reality setting in," said Peter Cardillo, chief market economist at First Standard Financial. " I think we have to expect more volatility and less momentum buying."

The Federal Open Market Committee raised its target range from 0.25 percent to 0.5 percent to a range of 0.5 percent to 0.75 percent. The overnight funds rate currently sits at 0.41 percent. In addition to approving the much-expected increase, the FOMC also indicated a The higher rate than projected back in September when it last released the quarterly look ahead. The committee now expects three rate hikes in 2017, two or three in 2018 and three in 2019.

" What happened here was that nobody was expecting the third rate hike" in the central bank' s forecast, said Tom Siomades, head of Hartford Funds Investment Consulting Group. " There was no data that would have necessitated that."

In a news conference following the Fed' s announcement, Chair Janet Yellen said President-elect Donald Trump' s plans to stimulate the economy with government spending figured into the central bank' s expectations for three rate hikes next year.

" If there is a large fiscal stimulus then this will almost certainly create inflationary pressure that the Fed will have to fight by raising rates. It' s far from clear how big any stimulus will be and will impact it will have. The Fed is as much in The dark about this as the rest of us, " said Luke Bartholomew, investment manager at Aberdeen Asset Management.

Most market participants were expecting the U.S. central bank to raise rates by 25 basis points According to the CME Group' s FedWatch tool, market expectations for a rate hike on Wednesday were almost 100 percent.

In oil markets, U.S. crude for January delivery fell 3.7 percent to settle at $ 51.04 per barrel, after the Energy Information Administration reported a drawdown of 2.6 million barrels.

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Volume:	1,939.1M
Value:	$950.3M
Gainers/Losers:	200/230

 

Symbol	Name	Price		Change	%Change
DJIA	Dow Industrials	19911.21		114.78	0.58%
S& P 500	S& P 500 Index	2271.72		14.76	0.65%
NASDAQ	NASDAQ Composite	5463.83		51.29	0.95%

 

Dow closes up triple digits, inching closer to 20,000 Fed decision looms

U.S. equities closed higher on Tuesday as investors kept an eye on a key Federal Reserve meeting, while the Dow Jones industrial average closed in on another milestone.

The Dow closed at a record, rising more than 100 points, with IBM, Apple and Home Depot contributing the most gains. The S & P 500 also ended at an all-time high, rising 0.6 percent, with energy and information technology leading advancers. The Nasdaq composite outperformed, advancing 0.9 percent to a new all-time high.

The Fed began a two-day monetary policy meeting, with most market participants expecting the central bank to raise interest rates by 25 basis points. According to the CME Group' s FedWatch tool, market expectations for a rate hike were above 90 percent.

" To me, it' s all about what they say about their guidance for 2017," said Eric Stein, co-director of global income at Eaton Vance. " I do not expect them to be hawkish tomorrow," but we could see a More hawkish Fed in the near future.

" A new political regime took hold on November 8th and tomorrow we' ll see if there is any acknowledgment of that from the FOMC and whether we' re about to embark on a new monetary regime. I would define ' new monetary regime' as anything More aggressive than the pace of one rate hike per year, " said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.

The meeting is expected to conclude Wednesday, with Fed Chair Janet Yellen scheduled to hold a news conference at 2:30 p.m. ET.

" Everyone is looking at the 20K level which is very important because there could be some profit taking at that level. This is a major resistance and psychological mark and traders will not hesitate to take some profit off the table to celebrate another bull year, Naeem Aslam, chief market analyst at Think Markets, said in a note.

Overseas, European equities traded higher, with the pan-European Stoxx 600 index rising 1.06 percent. In Asia, stocks closed mixed as the Shanghai composite advanced just 0.08 percent and the Nikkei 225 rose 0.5 percent.

U.S. crude futures for January delivery rose 0.3 percent to settle at $ 52.98 per barrel.

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