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Overnight Markets: Wall Street closes mostly higher after Fed rate hike

Packaged food and beverage stocks, health care companies and industrials shares accounted for much of the market’s modest gains.

Overnight Markets: Wall Street closes mostly higher after Fed rate hike

The major US stock indexes finished mostly higher on Wednesday, with small companies notching big gains after the Federal Reserve made a widely expected interest rate increase but kept its rate outlook for coming years even as it projected faster US economic growth.

The Dow Jones Industrial Average rose 81 points, or 0.33%, to 24,586, the S&P 500 lost one point, or 0.05%, to 2,663 and the Nasdaq Composite added 13 points, or 0.2%, to 6,876.

As expected, the central bank raised the federal funds rate by 0.25% points to a still-low range of 1.25% to 1.5%. The latest short-term rate increase is the third one implemented by the Fed this year and signals the central bank’s confidence that the US economy remains on solid footing eight years after the end of the Great Recession.

Packaged food and beverage stocks, health care companies and industrials shares accounted for much of the market’s modest gains. But a last-minute pullback in bank stocks left the S&P 500 index slightly lower.

Coca-Cola added 1.3%, while Incyte climbed 2.8%. Caterpillar led the gainers among industrials stocks, adding 3.6%. The construction and mining equipment company was also the biggest gainer in the Dow.

Western Digital rose 2.3% after the hard drive maker resolved a dispute with its partner Toshiba.

Finisar jumped 22.8% after Apple said it will invest $390 million in the fiber optic component supplier.

Target rose 2.7% after the retailer said it plans to boost its same-day delivery capability by paying $550 million for Shipt.

Financial sector declined the most among the 11 company sectors in the S&P 500, with Charles Schwab sliding 2.4%.

In Asia, shares edged higher on Thursday after the Fed delivered the much-anticipated interest rate increase in the US.

Japan's Nikkei inched up 0.1%. Australian stocks added 0.2% and South Korea's KOSPI climbed 0.55%. In Hong Kong, the Hang Seng added 0.12%, while China’s Shanghai Composite Index was down 0.20%.  

 

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