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U.S. stocks finish mixed after Fed policy decision

English.news.cn   2014-07-31 05:48:34

NEW YORK, July 30 (Xinhua) -- U.S. stocks closed mixed after fluctuating narrowly Wednesday, as investors mulled the U.S. Federal Reserve's latest policy decision and a strong rebound of the country's gross domestic product (GDP) in the second quarter.

The Dow Jones Industrial Average went down 31.75 points, or 0. 19 percent, to 16,880.36. The S&P 500 inched up 0.12 point, or 0. 01 percent, to 1,970.07. The Nasdaq Composite Index added 20.20 points, or 0.45 percent, to 4,462.90.

Following the release of the Fed's policy statement Wednesday afternoon, the market moved back and forth, as the U.S. central bank announced a further tapering of 10 billion U.S. dollars at the conclusion of a two-day policy meeting as expected.

The Fed did not give any signal about when it would start to hike interest rates in reaction to a surprising uptick in the U.S. economic growth rate.

The U.S. central bank reiterated that it will likely be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.

Federal Reserve Bank of Philadelphia President Charles I. Plosser objected to the guidance, arguing that the language of "a considerable time" is time dependent and does not reflect the considerable economic progress that has been made toward the Fed's goals, the statement showed.

The stock market initially went higher, as investors grew increasingly confident with the world's largest economy after a pair of key economic data came in before the opening bell.

The U.S. economy grew at an annual rate of 4.0 percent in the second quarter after unexpectedly shrinking in the first three months this year, the U.S. Commerce Department said Wednesday. The first quarter real GDP was upwardly revised to shrink 2.1 percent.

The second-quarter GDP was driven by an upswing in consumer spending and private inventory investment, topping analysts' expectations of a 3-percent growth.

Meanwhile, the U.S. private sector added more than 200,000 jobs for a fourth straight month in July. Private payroll processor ADP said in a report that private sector employment created 218,000 jobs in July, which is modestly below market consensus.

Investors are still awaiting the Labor Department's July non- farm payroll report due out Friday.

In corporate news, Twitter shares soared 19.98 percent to 46.30 dollars apiece after the social media company late Tuesday posted better-than-expected revenue and user growth in the second quarter.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, edged up 0.38 percent to end at 13.33 Wednesday, well below the long-term average of 20.

In other markets, the dollar rose across the board after official data showed U.S. economic growth unexpectedly reached 4 percent in the second quarter.

In late New York trading, the euro fell to 1.3392 dollars from 1.3410 dollars of the previous session. The dollar bought 102.87 Japanese yen, higher than 102.13 yen of the previous session.

Crude price fell as government report showed that U.S. gasoline stockpiles rose last week. Light, sweet crude for September delivery moved down 70 cents to settle at 100.27 dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery lost 1.21 dollars to close at 106.51 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange fell as investors speculated that strong U.S. GDP gave the Fed backing to tighten its monetary policy earlier than expected.

The most active gold contract for December delivery fell 3.6 dollars, or 0.28 percent, to settle at 1,296.9 dollars per ounce.

Editor: An
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