Stocks mostly rise after Fed decision

U.S. stock indexes overcame a wobble to close mostly higher Wednesday after the Federal Reserve said it would start reducing its huge bond portfolio next month and was still on track to raise interest rates later this year.

The Standard & Poor’s 500 index and Dow Jones industrial average edged up to record highs.

The central bank’s announcement drove bond yields up, lifting shares of financial firms. Banks benefit from higher bond yields because they can charge higher interest on loans.

High-dividend stocks, such as utilities and household goods makers, fell.

“The announcement was pretty much in line with what was expected,” said David Chalupnik, head of equities at Nuveen Asset Management. “The market is taking it in stride, but I don’t know if it should. This will slowly impact growth.”

Bond prices slumped, sending the yield on the 10year Treasury note down to 2.27% from Tuesday’s 2.25%.

Financial firms led the gainers. Zions Bancorporation climbed 1.6% to $45.11. Raymond James Financial rose 1.4% to $82.32.

The Fed statement gave a boost to the dollar, which rose to 112.38 yen from 111.50 yen. The euro fell to $1.1885 from $1.1997.

Technology firms were among the biggest decliners. Qorvo slid 5.4% to $70.32.

Adobe Systems slid 4.2% to $149.96. The business software firm posted solid quarterly results, but investors worried about the performance of its cloud business.

Western Digital fell 4% to $86.37 after Toshiba said it approved a deal to sell its chip business to Bain Capital. Western Digital had wanted to buy it.

Several packaged-food firms declined after General Mills’ quarterly results disappointed. The maker of cereal sank 5.8% to $52.17. Kellogg fell 1.8% to $64.72. Campbell Soup fell 1.7% to $46.51.

Bed Bath & Beyond plunged 15.9% to $22.74 after the retailer reported disappointing quarterly sales at stores open at least a year.

Investors also weighed new data on the U.S. housing market that showed sales of previously occupied homes fell 1.7% in August. Over the last 12 months, U.S. home sales are up only 0.2%. The report from the National Assn. of Realtors pulled down home-builder shares.

Energy companies rose with the price of crude oil.

Benchmark U.S. crude climbed 1.9% to $50.41 a barrel. Brent crude jumped 2.1% to $56.29 a barrel. Wholesale gasoline was flat at $1.66 a gallon. Heating oil rose 3 cents to $1.81 a gallon. Natural gas fell 3 cents to $3.09 per 1,000 cubic feet.

Gold rose $5.80 to $1,316.40 an ounce. Silver rose 6 cents to $17.33 an ounce. Copper stayed at $2.97 a pound.