Wall St edges up on telecom gains; Fed meet in focus

Jon Howard
September 21, 2017

USA stock index futures were little changed on Wednesday as investors awaited clues from the Federal Reserve meeting on whether the central bank will raise interest rates for a third time this year.

While some investors said the Fed's tone was more hawkish than expected others were happy Fed Chair Janet Yellen reiterated her stance that balance sheet reduction would be data dependent.

The Dow Jones Industrial Average rose 31.18 points, or 0.14 percent, to 22,362.53.

Market participants will pay to the Fed's updated and, particularly, the dot plot that anonymously maps out policymakers' individual forecast for interest rates with an eye towards whether tepid inflation has forced the central bank to give a more dovish outlook on the future path of interest rates.

The Fed's projections pointed to a quarter basis point rate increase later this year, with the rate hike widely expected to come at the December meeting.

The S&P 500 ended the day 0.15% higher at 2,503.87 thanks in part to a rally in bank stocks on the prospect of higher rates - that offset a fall in interest rate-sensitive utilities (which like lower rates).

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NAR said existing home sales slumped by 1.7 percent to an annual rate of 5.35 million in August after tumbling by 1.3 percent to a rate of 5.44 million in July.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored advancers.

Alnylam Pharmaceuticals (ALNY) posted a standout gain after the biopharmaceutical company reported positive trial results for its treatment of a rare genetic disease. On the Nasdaq, 1,596 issues rose and 764 fell. The weakness in the sector came as the price of gold came under pressure in electronic trading. Japan's Nikkei 225 Index inched up by 0.1%, while Australia's S&P/ASX 200 Index dipped by 0.1%.

The major European markets have also shown a lack of direction on the day. While the UK's FTSE 100 Index edged down by 0.1%, the German DAX Index and the French CAC 40 both crept up by 0.1%.

In line with expectations the Fed said it would begin in October to cut its roughly $4.2 trillion in U.S. Treasury bonds and mortgage-backed securities holdings by initially cutting up to $10 billion each month from the amount of maturing securities it reinvests.

Last week, the S&P 500 had weekly gains of 1.6%, its best since the first week of January while the more narrower Dow jumped 2.2% for its best week since early last December.

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