Stocks End Higher as Fed Keeps Rates Steady, Indicates No Monetary-Policy Changes Through 2020

Stocks ended higher as the Federal Reserve kept its key lending rate in place and indicated that it doesn’t plan to change monetary policy through next year.The central bank’s Federal Open Market Committee unanimously voted to keep its federal funds rate at 1.5% to 1.75% The FOMC has cut the rate by 75 basis points this year in three separate actions.

“Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate,” the central bank said in a statement. “Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.”

“The FOMC decision was as expected overall — the policy rate was unchanged and the statement reflected the committee’s decision to ‘move on’ past the ‘uncertainties’ (the word was in fact dropped) created by the trade war,” said Ian Lyngen, BMO Capital Market’s head of US rates strategy. “This was a telling change given there is still no clarity on the trade front.”

The Fed’s decision came hours after government data showed consumer-price inflation rose 0.3% last month, ahead of consensus estimate of 0.2%, according to Econoday. Annually, the measure rose 2.1%, above the Street’s view for 2%.

Tech shares added 0.7%, pulled higher by Skyworks Solutions’ (SWKS) 4.7% rise and Applied Materials (AMAT) 4.3% gain. Micron Technology (MU) and Western Digital (WDC) advanced 3.8% and 3.7%, respectively.

Materials shares also rose 0.7%, led higher by Freeport-McMoRan’s (FCX) 4.6% gain. Newmont Goldcorp (NEM) added 2.3%, and Martin Marietta Materials (MLM) advanced 1.3%.

United Technologies (UTX) rose 1.3%, helping to pull industrials up nearly 0.6%. CSX (CSX) gained 1.9%, and FedEx (FDX) added 1.3%.

Financials shed more than 0.2%. Wells Fargo (WFC) retreated 1%, and Progressive (PGR) fell 2.3%. Allstate (ALL) slipped 1%.

In corporate news, Children’s Place (PLCE) sank more than 23% after the children’s apparel retailer cut its full-year guidance and warned of weaker-than-expected mall traffic in the current quarter. American Eagle Outfitters (AEO) dropped 6.6% after the fashion retailer said markdowns have continued into the holiday quarter.

The Dow Jones Industrial Average ended more than 0.1% higher while the Standard & Poor’s 500 gained almost 0.3%. The Nasdaq Composite added more than 0.4%.

About the author

John Solman

John Solman

John Solman pursued a Master’s Degree in Finance from a US-based university. He manages to handle finance-related topics, which specifically includes research activities in the field of the stock market. John is quite experienced in playing with words, while due to his good understanding regarding stock and technology-related concepts, Expert Recorder news portal has offered him the post of Content Editor. During his spare time, he updates his knowledge by reading new market updates.