You are here

US: Stocks gain as Fed keeps rates low


[NEW YORK] US stocks rose on Wednesday after the Federal Reserve kept its benchmark interest rate at near-zero percent and gave no fresh clues on the timing of a long-awaited rate hike.

The Dow Jones Industrial Average rose 121.12 points (0.69 per cent) to 17,751.39.

The broad-based S&P 500 gained 15.32 (0.73 per cent) to 2,108.57, while the tech-rich Nasdaq Composite Index advanced 22.53 (0.44 per cent) to 5,111.73.

US stocks were in positive territory virtually the entire session, but added to gains after the Fed announcement. The US central bank had been expected to keep interest rates unchanged, but some experts thought it might elaborate on its plans for monetary policy.

"We started off on the right foot and we didn't get anything negative from the Fed," said Michael James, managing director for equity trading at Wedbush Securities.

James said US equities also benefited from a rally in Chinese stocks and from a rise in oil prices that lifted petroleum-linked stocks.

Dow member Chevron rose 0.9 per cent, while oil services companies Halliburton and Weatherford International rose 3.3 per cent.

Micro-blogging company Twitter slumped 14.5 per cent after executives warned of slow user growth. The company reported a US$137 million loss in the second quarter.

Online listings and reviews company Yelp plummeted 25.2 per cent after projecting third-quarter revenues of US$139-US$142 million, well below analyst expectations of $152.6 million.

Dow member Microsoft jumped 2.1 per cent following the launch of Windows 10, which the tech giant hopes will boost its presence on smartphones and other mobile technology.

Biotech company Gilead Sciences advanced 2.3 per cent after reporting that second-quarter earnings rose 22.9 per cent to US$4.5 billion due in part to large gains in antiviral product sales.

Ford Motor rose for a second day in a row after second quarter earnings bested expectations. The shares gained 3.6 per cent.

Chemicals company Cytec rose 27.1 per cent on news it agreed to be acquired by Belgium's Solvay for US$5.5 billion.

Tableau Software fell 10.7 per cent as it reported a loss of US$18 million for the second quarter despite a 65 per cent surge on revenues to US$149.9 million. Cantor Fitzgerald said growth trends were strong, but the stock was a "victim of high expectations." Bond prices fell. The yield on the 10-year US Treasury rose to 2.28 per cent from 2.25 per cent Tuesday, while the 30-year advanced to 2.99 per cent from 2.97 per cent. Bond prices and yields move inversely.