Markets end mostly down after Fed holds rates steady
A Wall Street address is carved into the side of a building in New York. U.S. stock indexes were flat early Thursday in advance of a much-anticipated Federal Reserve decision on interest rates.
Stocks ended mostly lower after a volatile day as traders tried to figure out what was next for U.S. interest rates.
The bumpy trading Thursday came after the Federal Reserve decided to keep interest rates low, citing weakness in the global economy and unsettled financial markets.
Bond prices rose, sending yields lower, as traders reacted to the Fed’s prediction that inflation will remain subdued. The dollar fell against other currencies.
The Dow Jones industrial average ended down 65 points, or 0.4 percent, at 16,674. It rallied shortly after the Fed’s statement came out, then drifted lower for the rest of the day.
The Standard & Poor’s 500 gave up five points, or 0.3 percent, to 1,990 and the Nasdaq rose four points, or 0.1 percent, to 4,893.
For more than a year, markets have jumped and dived on speculation over the course of the Federal Reserve Open Market Committee, which concluded two days of meetings with the rate announcement.
The Fed has had to navigate an especially murky economic and financial landscape, as reasonably strong U.S. economic growth and unemployment figures have been offset by sluggish growth in Europe and deepening uncertainty over the Chinese economy as its slows from double-digit growth.
Global stocks were roiled last month when China announced it was devaluing its currency, and Chinese stock markets on Thursday continued a volatile ride that began in June, with the Shanghai Composite Index falling more than 2% and the China Shenzhen index falling about 1.5%.
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After a rough August, U.S. stocks have risen more than 1% this week as investors anticipate that the Fed’s rate-setting panel would again put off a rate hike.
Russ Koesterich, chief investment strategist for BlackRock Inc., wrote this week that while the price-to-earnings ratio for U.S. stocks is down 7% from its peak in February, stock prices remain elevated by historical standards.
A rate hike announcement Thursday almost certainly would have pulled down stocks.
Twitter: @deanstarkman
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