New York Report: Wall St edges higher after Fed statement
THE S&P 500 finished a volatile session nearly flat yesterday after the Federal Reserve gave no hint that a reduction in the pace of its bond-buying program is imminent.
After paring most of the day’s gains just before the close, the S&P 500 ended July up 5 per cent – its best monthly percentage increase since January. In a statement following its two-day policy meeting, the Fed said the economy continues to recover but still needs support.
Stocks mostly extended gains following the Fed’s statement, led by S&P indexes tracking consumer discretionary, energy and other growth sectors. The S&P consumer discretionary index ended up 0.5 per cent.
At the same time, dividend-paying stocks such as utilities slipped. The S&P utility index slid 0.7 per cent.
“The Fed continues to try to talk down the concerns of kind of a premature taper. In fact, there were even tones in this piece that were a little disinflationary,” said Burt White, chief investment officer of LPL Financial.
The Fed’s stimulus has been credited by many as central to the S&P 500’s gain of 18.2 per cent so far this year. Federal Reserve chairman Ben Bernanke jolted markets in late May by saying the central bank planned to ease back on its stimulus efforts once the economy improves.
Shares of J.C. Penney sank 10.2 per cent to $14.60 after commercial lender CIT Group stopped supporting deliveries from smaller manufacturers to the retailer, according to a New York Post report.
The Dow Jones industrial average slipped 21.05 points, or 0.14 per cent, to end at 15,499.54. The Standard & Poor’s 500 Index dipped 0.23 of a point, or 0.01 per cent, to finish at 1,685.73. In contrast, the Nasdaq Composite Index rose 9.90 points, or 0.27 per cent, to close at 3,626.37.