Dow closes at record high
US stocks ended with moderate gains on Wednesday, 17 September 2014. The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. 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.
The Dow Jones Industrial Average added 24.88 points, or 0.2% to 17,156.85. The Nasdaq Composite gained 9.43 points, or 0.2%, to 4,562.19. The S&P 500 rose 2.59 points, or 0.1 to 2.001.57.
Seven of ten sectors posted gains with materials ending in the lead.
The central bank left interest rates unchanged and continued to whittle down its bond-buying program, often referred to as quantitative easing, by another $10 billion a month, as was expected. As expected, the Fed reduced the monthly pace of its asset purchases by $10 billion to $15 billion, setting expectations for the program to be wound down at the next meeting. Furthermore, the Fed maintained the "considerable time" language in its forward guidance, suggesting the first rate hike remains somewhat distant. On that note, the economic projections that were also released indicated the Fed sees the fed funds rate at 1.375% at the end of 2015.
As per latest report from Wall Street, the CPI report for August revealed a 0.2% decline, while the consensus expected an unchanged reading. This was the first decline in total CPI since April 2013, driven by a 2.6% decline in the energy index. Core CPI, meanwhile, was flat against a 0.2% uptick expected by the consensus. 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.
Also, 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.
Among stocks under focus, shares of FedEx rose 3.3% following better than expected earnings.
The dollar added to gains on the news, hitting a six-year high against the Japanese yen and gaining ground on the euro. A stronger greenback is usually a negative for commodities because it makes the dollar-priced raw materials more expensive for holders of other currencies. The dollar remained up slightly against the yen and euro on Wednesday.
Bullion prices dipped on Wednesday, 17 September 2014 at Comex on concerns about a stronger dollar ahead of the Federal Reserve policy statement and in response to Barclays lowering its gold forecast. Gold futures eased modestly but quickly stabilized after a policy statement and forecasts from the Federal Open Market Committee that retained the considerable time language for when interest rates might rise but nevertheless was seen as ever so slightly setting markets up for eventual increases.
Gold for December delivery ticked down 80 cents, settling at $1,236.70 an ounce. December silver fell 7.1 cents to $18.65.
Crude oil futures declined on Wednesday, 17 September 2014 at Nymex after a weekly supply report showed a surprise inventories increase. Futures had rebounded on the previous session after the Organization of the Petroleum Exporting Countries' Secretary General Abdalla el-Badri said he expected the cartel to trim its output next year, and on expectations the Federal Reserve won't be more aggressive in signaling future rate hikes.
Light, sweet crude for October delivery fell 46 cents, or 0.5%, to settle at $94.42 a barrel on the New York Mercantile Exchange.
Earlier Wednesday, the U.S. Energy Information Administration said inventories rose 3.7 million barrels in the week ended 12 September 2014. That contrasted with expectations of a decline by 400,000 barrels. Gasoline supplies were down by 1.6 million barrels, while distillates supplies rose 300,000 barrels. Gasoline stocks were seen down 300,000 barrels, and distillate stocks were expected to end the week unchanged.
Today's participation was ahead of recent averages with more than 650 million shares changing hands at the NYSE.
Tomorrow, weekly Initial Claims and August Housing Starts (consensus 1045K)/Building Permits (expected 1054K) will be released at 8:30 ET, while the Philadelphia Fed survey for September (consensus 23.5) will cross the wires at 10:00 ET.
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