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Dow turns south to end 106 points lower as bank stocks sink the broader market after Powell’s Fed news conference
The Dow Jones Industrial Average finished firmly in the red on Wednesday, with the broader market pivoting decidedly lower soon after Federal Reserve Chairman Jerome Powell concluded his 2:30 p.m. Eastern news conference to discuss the central bank’s third rate increase of 2018. The Dow closed down by about 107 points, or 0.4%, to 26,385, but had traded within a tight band, enjoying a gain of as many as 55 points at the highs throughout the Powell conference. The Fed boss offered an explanation for the removal of the term “accommodative” from the central bank’s policy statement. The Federal Open Market Committee lifted short-term interest rates by a quarter-percentage point to a range of 2% to 2.25%, and officials signaled they expected to raise them again in December and as many as three times in 2019, on the back of what was characterized as a strong economy. “Our economy is strong, growth is running at a healthy clip,” Powell said, during the afternoon news conference following the rate decision. He referred to the dynamics in the market as supporting “good times”, and said tariff disputes between the U.S. and global trade partners and risks building in the system were on the radar but weren’t an immediate concern for the policy-setting FOMC. Yanking the broader market lower was a slump in financials, as gauged by the Financial Select Sector SPDR ETF , which closed down 1.2%, as the 10-year Treasury yield edged back below 3.05%, compared with around 3.08% prior to the rate decision. Ordinarily banks benefit from a rising rate environment. Shares of Dow components, JPMorgan Chase & Co. , Goldman Sachs Group Inc. and American Express Co. , all finished firmly lower. Meanwhile, the S&P 500 index declined 0.3% at 2,906 and the Nasdaq Composite Index retreated by 0.2% at 7,990. Another drag on the broader market, outside of the Fed, was a decline in crude-oil prices , which finished lower amid a report showing a surprise build in inventories. The energy sector was the second-worst performer among market sectors, off 1%, after financials.
Check out: Fed raises interest rates and signals strong support for December hike
Read: A recap of Jerome Powell’s news conference
Source : MTV
