Business World

Wall St. slips as Fed holds rates

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Wall Street ended slightly lower on Wednesday after the US Federal Reserve held interest rates unchanged and investors digested another heavy round of earnings reports. The benchmark S&P 500 reduced its losses following the statement from the US central bank in a sign it could tighten monetary policy as early as June.

WALL STREET ended slightly lower on Wednesday after the US Federal Reserve held interest rates unchanged and investors digested another heavy round of earnings reports.

The benchmark S& P 500 reduced its losses following the statement from the US central bank, which downplayed weak first- quarter economic growth and emphasized the strength of the labor market, in a sign it could tighten monetary policy as early as June. Investors are betting on a 65% chance of a hike in June, according to Thomson Reuters data.

The S& P financial sector, seen benefiting in a rising rate environmen­t, ended up 0.60% after the Fed’s bullish statement, leading all groups. Seven of the 11 major sectors finished negative, however.

The Fed is in its first tightening cycle in more than a decade after it spent years keeping rates near zero to help the economy following the 2007-2009 recession.

“The Fed is communicat­ing its mantra of gradual rate hikes,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvan­ia. “The next time they will likely raise rates would be June.”

The S&P 500 lost 3.04 points, or 0.13%, to 2,388.13. The Nasdaq Composite dropped 22.82 points, or 0.37%, to 6,072.55, its biggest percentage drop in about three weeks.

The Dow Jones Industrial Average rose 8.01 points, or 0.04%, to 20,957.90.

The S&P 500 has returned to within 8 points of its all- time high during an earnings season that generally come in above expectatio­ns.

First- quarter profits at S& P 500 companies are estimated to increase 14.20%, its strongest growth since 2011, according to Thomson Reuters I/B/E/S.

Apple shares fell 0.30%, weighing on indices, but recovering from steeper losses after the company’s quarterly report, in which it reported a surprise fall in iPhone sales.

The S& P 500 has climbed 11.60% since President Donald Trump’s Nov. 8 election, fueled by hopes for tax cuts, deregulati­on and infrastruc­ture spending, although investors have questioned his ability to enact his agenda.

“There was a lot of optimism based on the Trump agenda at the start of the new year and it has started to peter out,” said Robert Pavlik, chief market strategist at Boston Private in New York.

In other corporate news, Sprint shares slid 14.30% after the US wireless carrier did not give specifics on deals it would pursue, even as its quarterly loss narrowed.

Delphi Automotive shares jumped 10.90%. The company said it planned to spin off operations tied to internal combustion engines and focus on technology for electrical­ly powered and selfdrivin­g vehicles. The stock was the biggest percentage gainer in the S&P 500.

The New York Times Co. rose 12.60% after the newspaper publisher reported its biggest quarterly revenue growth in six years.

After the market close, Facebook, Inc. shares fell more than 1% even as the social media company reported a 76.60% surge in quarterly profit.

About 7.3 billion shares changed hands in US exchanges, above the 6.6 billion daily average over the past 20 sessions.

NYSE declining issues outnumbere­d advancing ones by 1.47-to-1. On Nasdaq, a 1.79-to-1 ratio favored decliners.

The S& P 500 posted 31 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 83 new highs and 71 new lows. — Reuters

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