Dow was supported by sharp gains in shares of McDonald's and Pfizer
U.S. stock benchmarks ended a volatile session mostly in a ixed note on Wednesday, 20 September 2017 , with the Dow industrials and the S&P 500 carving out fresh all-time highs, as the Federal Reserve announced that, for the first time in nine years, it would start reducing the size of its $4.5 trillion asset portfolio commencing in October.
The Dow Jones Industrial Average rose 41.79 points, or 0.2%, at 22,412.59. The Nasdaq Composite Index ended down 5.28 points, or less than 0.1%, at 6,456.04. The S&P 500 index finished up 1.59 point, or less than 0.1%, at 2,508.24, after briefly touching its own fresh intraday day record at 2,508.85.
Dow was supported by sharp gains in shares of McDonald's and Pfizer. Apple shares led Dow laggards, down 1.7%, on negative news.
Financials and industrials led the day's advances.
The U.S. central bank kept interest rates unchanged, as widely expected, but said it would start to shrink its balance sheet by $10 billion a month. The Fed also signaled a December rate increase remains on the table as the central bank embarks on an unprecedented unwind of crisis-era asset purchases that had helped to buoy markets over the past decade. The Fed committed to reducing the bonds they own at a pace of $10 billion a month and increasing that pace by $10 billion every three months to a maximum pace of $50 billion a month, or $600 billion a year.
The Fed kept its targeted federal-funds rate between 1% to 1.25%, and said the devastation caused by Hurricanes Harvey and Irma isn't likely to materially alter the course of the economy over the medium term, underscoring the central bank's determination to normalize interest-rate policy.
Bullion prices settled higher Wednesday, 20 September 2017 at Comex. Gold prices snapped a string of three-straight losses, but pulled back in electronic trading after a statement from U.S. Federal Reserve pointed to one more interest-rate hike this year.
Gold for December delivery fell to $1,308.60 an ounce shortly after the statement. It settled at $1,316.40 an ounce, up $5.80, or 0.4%, for the first session gain in four. December silver climbed 5.5 cents, or 0.3%, to settle at $17.334 an ounce before the Fed news.
The ICE Dollar index which measures the greenback against a basket of six rival currencies, rose 0.6% reversing course after earlier declines. U.S. stocks continued to trade mostly lower.
Economic data at Wall Street showed that existing home sales for August decreased 1.7% from July to an annualized rate of 5.35 million units while the consensus expected a reading of 5.42 million. The prior month's reading was left unrevised at 5.44 million. The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability. Separately, the weekly MBA Mortgage Applications Index decreased 9.7% to follow last week's 9.9% rise.
Crude oil prices finished at the highest level in months on Wednesday, 20 September 2017 buoyed by tensions between the U .S. and Iran and expectations that OPEC will decide to extend its production-cut deal. Prices, however, finished off the session's highs on the heels of a third-straight weekly jump in U.S. crude supplies, a hefty rise in production, and a rise in the dollar as the U.S. Federal Reserve signaled one more interest-rate hike this year.
U.S. benchmark October West Texas Intermediate crude which expired at the day's settlement, rose 93 cents, or 1.9%, to settle at $50.41 a barrel on the New York Mercantile Exchange. It had traded as high as $50.65 during the session. November WTI crude ended at $50.69, up 79 cents, or 1.6%.
A report from U.S. Energy Information Administration Wednesday showed that domestic crude supplies climbed by 4.6 million barrels for the week ended Sept. 15. That topped the forecast for a rise of 2.4 million barrels. The EIA also said total domestic crude output rose by 157,000 barrels a day to 9.510 million barrels a day.
Meanwhile, 10-year Treasury note yield jumped to 2.27%, compared with 2.23% earlier in the session, with expectations for higher rates and additional monetary tightening. That encouraged selling in government bonds, pushing yields, which move in the opposite direction to prices, higher.
On Thursday, investors will receive several economic reports, including the weekly Initial Claims Report ( consensus 310K) at 8:30 ET, the September Philadelphia Fed Index (consensus 17.1) also at 8:30 ET, and the July FHFA Housing Price Index at 9:00 ET.
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