Dow ends sightly higher as bank stocks take an unusual bounce higher after Fed cuts interest rates
U.S. stock indexes on Wednesday finished mostly higher--even if only slightly so--after the Federal Reserve cut benchmark rates, as expected. The Dow Jones Industrial Average closed up 36 points, or 0.1%, to 27,147, but had been down by as many as 211.65 points at session lows. Meanwhile, the S&P 500 index added about a point, or less than 0.1%, to end at at 3,006.73. The Nasdaq Composite index edged 9 points, or 1%, lower to 8,177. The rate-setting Federal Open Market Committee cut rates by one quarter of a percentage point to a range of 1.75%-2%, in a 7-3 vote. Stocks initially took a leg lower but began to pare losses as Fed Chairman Jerome Powell explained the rate decision in a press conference at 2:30 p.m. Eastern, about a half-hour after the release of the central bank's policy statement. Voting against the action were St. Louis Fed President James Bullard, who preferred to lower the target range for the federal-funds rate to 1.50% to 1.75%. Kansas City Fed President Esther George and Boston Fed President Eric Rosengren both preferred to maintain the target range at 2% to 2.25%."Bottom line, there is now a likelihood that as of today, this might be the last rate cut of the year as the 'mid course adjustment' process continues but could be done. So call this a hawkish cut," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a research note after the Fed decision. The 10-year Treasury yield climbed after the Fed decision, with the rate rising to 1.79%, helping to deliver a lift to the banking sector, which tends to benefit from higher yields, even though the Fed cut rates. The Financial Select Sector SPDR ETF finished the session with a 0.4%, and shares of Goldman Sachs Group Inc. and those for JPMorgan Chase & Co. led gains for the blue-chip Dow.
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