Wall Street holds slim gains as Fed stands pat on rates

By Lewis Krauskopf

(Reuters) - Wall Street held onto modest gains on Wednesday after the Federal Reserve kept interest rates unchanged, as major equity indexes hovered around record-high levels.

The U.S. central bank pointed to solid U.S. economic growth and a strengthening labour market while downplaying the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December.

The Fed has raised rates twice this year and currently forecasts one more hike by the end of 2017 as part of a tightening cycle that began in late 2015.

"I don't think there is anything real surprising out of this," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

 

"The comments on the economy were pretty good, talking about solid growth, strong labour market despite the hurricanes. I think those are all good things," Frederick said. "I would say it pretty close to seals a December rate hike."

The Dow Jones Industrial Average <.DJI> rose 51.78 points, or 0.22 percent, to 23,429.02, the S&P 500 <.SPX> gained 5.21 points, or 0.20 percent, to 2,580.47 and the Nasdaq Composite <.IXIC> dropped 15.04 points, or 0.22 percent, to 6,712.63.

Energy <.SPNY> was the best-performing sector, while telecoms <.SPLRCL> lagged the most.

(Additional reporting by Saqib Iqbal Ahmed in New York, Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski)