Dow Jones Industrial Average Boosts Up As Fed Raises Rates

The stock indexes in US closed higher on Wednesday because of an oil rate bounce after Federal Reserve had a less aggressive than expected stance. The interest rates were raised by the central bank as expected.

Dow Jones closed up at a triple digit, about 110 points after the released statement. Most gains were contributed by UnitedHealth with Caterpillar and Johnson & Johnson following right behind.

A fresh intraday high was also seen in the NASDAQ Composite 100, closing at a record. This was due to the record highs in shares of Apple Inc. Stocks of semiconductor companies also reversed losses with iShares PHLX Semiconductor ETF ending higher as well, by nearly 0.8 percent.

The target range for federal funds rate was also raised by the Fed. It is now between 0.75% and 1%. The only no vote for this came from Neel Kashkari, the Minneapolis Fed President. The policy makers said in a statement that they are expecting conditions in the labor market to strengthen more and inflation to stabilize to about 2% in the coming term.

After the release of this statement, the Treasury yields fell. The 2Y Yield dropped to 1.3%. Earlier this season, this yield hit 1.4%, its highest value since June, 2009. The 10Y Yield was at 2.5%. Both the yields were at their lowest value in the week.

The index of the greenback extended its losses to trade at about 1% lower and these levels were not seen in about two weeks. The Euro traded at $1.073 and Yen at 113.4 Yen against the US Dollar.

The financial stocks just fell in the S&P 500. There were advances in the energy sector, which closed up 2.1%. US Crude oil futures were at $48.86 per barrel, up 2.39% after the weekly inventory data showed a stockpile drawdown. The consumer price index was up 0.1% in February and Ex-food and energy costs, the core Consumer Price Index was also up by 2.2% in twelve months through February.

Retail sales also showed a 0.1% rise, which is their weakest print since August. If we exclude food services, building material, gasoline, and automobiles, the core retail sales rose by 0.1% after a revised upwardly 0.8% jump in the month of January. The retail sales and CPI clearly matched the expectations.

According to the New York Federal Reserve, the ESMI (Empire State Manufacturing Index) lowered to 16.4 in March. The new order index climbed to 21.3, roughly by 8 points, its highest since 2009. There was a 0.3% rise in Business Inventories in January.

Dow Jones closed up 112.73 points at 20950.10. American Express still lagged. S&P 500 was up 19.81 points at 2385.26. Financials declined, but energy was the advancer. NASDAQ Composite closed at 5900.05 by gaining 43.23 points, mostly because of Apple.

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