Stocks rise, shaking off tech slump, after Fed leaves interest rates unchanged

U.S. stocks rose Wednesday after the Federal Reserve left its key interest rate unchanged, as investors expected. Energy companies climbed again as the price of oil came close to a six-month high. Technology stocks were battered following weak results from Apple and Twitter.

Stocks opened mostly lower in muted early trading, but they moved higher after the Fed released its decision on interest rates. Bond yields fell and investors bought high-dividend phone and utility companies instead. The tech-heavy Nasdaq composite index fell for the fifth day in a row.

Investors didn’t expect the Fed to raise interest rates this month, and they’re starting to think the Fed won’t raise rates at its next meeting in June either. But David Kelly, chief global strategist JPMorgan Chase, said that might be a problem because the Fed didn’t make its intentions clear Wednesday.

“There’s nothing in this to tell us when the next rate hike is going to be,” Kelly said. He thinks the market will react badly if the Fed raises interest rates without advising investors that it’s coming.

“What they can’t do is just coast into the June meeting having not given anybody any indication at all,” Kelly said.

The Dow Jones industrial average climbed 51.23 points, or 0.3%, to 18,041.55. The Standard & Poor’s 500 index rose 3.45 points, or 0.2%, to 2,095.15. The Nasdaq composite index dropped 25.14 points, or 0.5%, to 4,863.14.

Bond prices were rising before the Fed’s announcement and moved even higher after its statement was released. Higher prices mean lower yields, and the yield on the 10-year U.S. Treasury note fell to 1.86% from 1.93%. Lower bond yields made telecommunications and utility stocks more appealing to investors seeking income. Verizon Communications rose 2.5% to $51.69. NRG Energy advanced 3% to $14.98.

The price of crude oil started with big gains, turned lower and then bounced back. It wound up at its highest price since early December. Benchmark U.S. crude oil rose $1.29, or 2.9%, to $45.33 a barrel in New York. Brent crude, the international standard, advanced $1.44, or 3.1%, to $47.18 a barrel in London.

Among energy stocks, Anadarko Petroleum climbed 4.6% to $54.78 and Diamond Offshore Drilling rose 4.1% to $24.63.

Tech stocks fell after Apple, the most valuable public company in the world, said iPhone sales declined in the first quarter. That hadn’t happened since iPhones went on sale in 2007. Apple also reported its first decline in quarterly revenue since 2003 and forecast similar results in the current quarter. Its stock skidded 6.3% to $97.82.

Twitter dropped 16.3% to $14.86 after its first-quarter revenue fell short of expectations and its outlook disappointed investors. Its stock has fallen 71% in the last year.

Earnings reports were responsible for much of the day’s action. Aerospace giant Boeing was the biggest gainer on the Dow average. The company reported mixed first-quarter results, with weaker-than-expected earnings but strong sales. The stock rose 2.9% to $137.08.

Medical device maker Boston Scientific climbed to its highest price in 10 years after it swung to a profit in the first quarter, with earnings and sales that were better than expected. It also raised its projections for the year. The stock soared 11.2% to $21.89.

Buffalo Wild Wings tumbled 10.8% to $129 after the chain’s sales fell short of analyst projections. Chipotle Mexican Grill fell 6.4% to $417.22. Chipotle posted its first loss as a public company as sales plunged following an E. coli outbreak and Norovirus scare.

Tax preparer H&R Block slumped 13.6% to $20.59 after the company said it handled fewer returns this year than it did in 2015 and announced a series of executive changes.

DreamWorks Animation rocketed 18.7% to $32.20 on reports that the company behind the “Shrek” and “Kung Fu Panda” franchises might be acquired by Comcast. Comcast stock rose 2 cents to $61.30.

Struggling Internet company Yahoo agreed to add four directors backed by activist investment firm Starboard Value to its board. That ends a potential proxy fight between Yahoo and Starboard. The new directors include Starboard chief Jeffrey Smith. Two current Yahoo directors won’t run for new terms. Yahoo stock slipped 16 cents to $36.95.

The price of gold rose $7 to $1,250.40 an ounce. Silver advanced 18 cents, or 1%, to $17.29 an ounce. Copper fell 3 cents, or 1.1%, to $2.22 a pound.

In other energy trading, wholesale gasoline edged up 1 cent to $1.58 a gallon. Heating oil jumped five cents, or 3.5%, to $1.38 a gallon. Natural gas fell four cents, or 1.8%, to $2 per 1,000 cubic feet.

The CAC-40 in France finished 0.6% higher, and Britain’s FTSE 100 was also up 0.6%. Germany’s DAX rose 0.4%. Japan’s benchmark Nikkei 225 slid 0.4%. Hong Kong’s Hang Seng fell 0.2%.

The dollar slipped to 111.34 yen from 111.41 yen. The euro rose to $1.1323 from $1.1291.