Stocks mostly up after Fed meeting

Stocks overcame an afternoon wobble to close mostly higher 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.

Bond yields rose following the Fed’s announcement Wednesday. That helped send bank stocks higher. Banks benefit from higher bond yields because it means they can charge higher interest rates on loans.

PNC Financial Services rose 1.3 percent.

High-dividend stocks like household goods makers fell. Kraft Heinz fell 1.2 percent.

The Standard & Poor’s 500 index rose 1 point to 2,508. The Dow Jones industrials added 41 points, or 0.2 percent, to 22,412. The Nasdaq slipped 5 points to 6,456.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.28 percent.

The Fed announced Wednesday that it will let a small portion of its $4.5 trillion balance sheet mature without being replaced, starting in October with reductions of $10 billion a month and gradually rising over the next year to $50 billion a month.

John Silvia, chief economist at Wells Fargo, said some investors appeared surprised that the Fed still expects to raise rates by December. With Hurricanes Harvey and Irma clouding some economic data — temporarily raising gas prices, likely restraining hiring and potentially depressing growth in the JulySeptember quarter — some analysts assumed the Fed wouldn’t have enough information by December to assess whether the economy had rebounded from the storms.

“A lot of people were thinking that (the Fed) would pass in December,” Silvia said.

At a news conference, Chair Janet Yellen said the Fed still believes that persistently low inflation — below the Fed’s 2 percent target rate for four years — is temporary.