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US close: Stocks record small gains following Fed announcement

By Iain Gilbert

Date: Wednesday 11 Dec 2019

US close: Stocks record small gains following Fed announcement

(Sharecast News) - Wall Street stocks recorded some small gains on Wednesday as market participants digested the latest policy announcement from America's central bank.
At the close, the Dow Jones was up 0.11% at 27,911.30, while the S&P 500 was up 0.29% at 3,141.63 and the Nasdaq Composite saw out the session 0.44% firmer at 8,654.05.

The Dow closed 29.58 points higher on Wednesday after stocks finished below the waterline following a choppy session, on Tuesday, that saw investors remain glued to their screens for any hint of fresh developments in the ongoing US-China trade war.

Stocks pared some earlier losses after policymakers at the US Federal Reserve voted unanimously on Wednesday to keep policy unchanged, nodding to still "solid" labour market conditions, but pointing out that business fixed investment and exports remained weak and that its preferred measure of inflation continued to run below target.

As expected, the members of Federal Open Market Committee voted to keep the target range for the Fed funds rate at between 1.5-1.75%, arguing that the decision was "appropriate" in order to sustain the economic expansion and keep inflation near the committee's 2.0% target.

Elsewhere, there continued to be no clear indication as to whether or not Washington and Beijing will reach an agreement over trade that could stop or reduce the current level of tariffs. The White House was set to slap fresh duties on another $156bn-worth of Chinese goods on Sunday.

On the data front, refinance volumes pushed total mortgage application activity 3.8% higher week-on-week, according to the Mortgage Bankers Association's seasonally adjusted index.

Volumes were 63% higher than in the same week one year ago, while applications to refinance a home loan jumped 9% for the week and were 146% higher year-on-year.

Elsewhere, higher energy prices saw the cost of living in the US accelerate last month to a one-year high.

According to the Department of Labor, the year-on-year rate of increase for headline consumer prices picked up from 2.0% in October to 2.1% for November (consensus: 2.0%).

Headline CPI increased by 0.3% month-on-month - led by a 0.8% jump in energy prices.

In the corporate space, Home Depot shares closed lower after forecasting 2020 sales growth below expectations, while Boeing shares flew higher despite Federal Aviation Administration boss Steve Dickson saying the re-certification process for the embattled 737 Max would stretch into the new year.


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