By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch)--The U.S. stock market closed slightly
higher Wednesday, with the Dow Jones Industrial Average reaching a
record high.
The main benchmarks swung higher after the Fed meeting and Fed
Chairwoman Janet Yellen's news conference but trimmed gains by the
end of the session.
In the end, the Federal Reserve stuck to its view that it will
keep short-term interest rates near zero for a "considerable time"
after the central bank ends large-scale purchases of bonds meant to
stimulate the U.S. economy.
Janet Yellen didn't commit any gaffes in her news conference,
nor did she give any ground to the hawks on the committee and in
the markets who wanted her to signal that rate hikes are just
around the corner.
The S&P 500 (SPX) rose 2.59 points, or 0.1 to 2.001.57. The
Dow Jones Industrial Average (DJI) added 24.88 points, or 0.2% to
17,156.85. The Nasdaq Composite (RIXF) gained 9.43 points, or 0.2%,
to 4,562.19.
Read the recap of Wednesday's stock market coverage in a live
blog.
Tanweer Akram, senior economist at Voya Investment Management,
said that while the Fed's decision was in line with expectations,
its subsequent decisions will still be contingent on data and the
pace of recovery in the labor market.
"The fact that there is still slack in the labor market there is
no inflationary pressure means the Fed will be cautious about
withdrawing accommodation.
In economic news, U.S. consumer prices fell in August for the
first time in 16 months, largely because of a decline in the cost
of gasoline. Separately, the U.S. current-account deficit fell to
$98.5 billion in the second quarter from a revised $102.2 billion
in the first quarter, the Commerce Department said Wednesday.
A gauge of confidence among home builders rose in September to
the highest level since November 2005, according to National
Association of Home Builders/Wells Fargo data released
Wednesday.
Stocks to watch: Auxilium Pharmaceuticals Inc. (AUXL) soared
45%, after news late Tuesday that Endo International PLC (ENDP)
will buy it for $28.10 per share in a cash-and-stock deal. Endo was
up 5%.
Lennar Corp.(LEN) rose 5.6% after posting a 47% rise in
third-quarter profit on Wednesday as higher prices and deliveries
drove up revenue.
General Mills Inc. (GIS) fell 4.6% after posting a disappointing
quarterly profit.
DuPont (DD) shares rose 5.2% after an investor urged a breakup
of the company.
FedEx Corp. (FDX) rose 3.3% after posting better-than-expected
profit and sales.
U.S. Steel Corp. (X) was up 10% after the company said it was
making major strategic changes late Tuesday.
Adobe Systems Inc. (ADBE) fell 4.9%. The software maker posted
quarterly results on Tuesday.
Rackspace Hosting Inc. (RAX) tumbled 17% after the
cloud-computing company said it won't be selling itself. (Read more
about the day's notable movers here
http://www.marketwatch.com/story/adobe-rackspace-fedex-expected-to-be-in-spotlight-2014-09-17.).
Other markets: After the Fed decision, the dollar (DXY) pushed
to a new six-year high versus the Japanese yen and gained ground on
the euro. Short-term Treasury prices fell and the yield curve
flattened.
Gold (GCZ4) prices dipped Wednesday on concerns about a stronger
dollar ahead of the Federal Reserve policy statement and in
response to Barclays lowering its gold forecast. Oil prices (CLZ4)
were largely unchanged.
In Asia, Hong Kong stocks broke a five-session losing streak
after a senior Chinese banking executive said the People's Bank of
China is injecting 500 billion yuan ($81 billion) into the
country's five big state-owned banks to help counter an economic
slowdown. A string of recent weak data has heightened worries among
investors.
The Stoxx Europe 600 index took inspiration from Wall Street and
China stimulus, while the FTSE 100 managed small gains ahead of
Thursday's vote on Scottish independence.
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