Stocks skid after Fed holds rates
Friday, 18 December 2009
NEW YORK, Dec 17 (CNNMoney.com): Stocks ended mixed Wednesday after the Federal Reserve left interest rates unchanged, saying market conditions were helping the recovery but weakness will persist.
The Dow Jones industrial average (INDU) fell 11 points, 0.1 per cent. The S&P 500 index (SPX) rose 1 point, or 0.1 per cent, while the Nasdaq composite (COMP) gained 6 points, or 0.3 per cent.
The US central bank released its final policy statement of the year at 2:15 pm ET to capstone its two-day meeting.
The Federal Reserve said it would hold the fed funds rate, a key overnight bank lending rate, unchanged at historic lows near 0 per cent -- the level at which the rate has stood for a year.
Stocks had started the day higher, but the market was unable to sustain those gains after the Fed released its statement.
"There are no real surprises here," said Peter Cardillo, analyst at Avalon Partners. "Investors know what's going on with the economy, so it's priced into the market."
In its statement, the Fed said weakness will remain for a bit but a combination of government action, stimulus and market forces "will contribute to a strengthening of economic growth."
The central bank has kept rates low and injected trillions of dollars into the economy in an effort to offset the recession's impact.
The Fed's statement singled out strength in a few sectors, including housing and consumer spending, and it noted that while the labour market continued to lose ground, the pace was slowing.
The Dow Jones industrial average (INDU) fell 11 points, 0.1 per cent. The S&P 500 index (SPX) rose 1 point, or 0.1 per cent, while the Nasdaq composite (COMP) gained 6 points, or 0.3 per cent.
The US central bank released its final policy statement of the year at 2:15 pm ET to capstone its two-day meeting.
The Federal Reserve said it would hold the fed funds rate, a key overnight bank lending rate, unchanged at historic lows near 0 per cent -- the level at which the rate has stood for a year.
Stocks had started the day higher, but the market was unable to sustain those gains after the Fed released its statement.
"There are no real surprises here," said Peter Cardillo, analyst at Avalon Partners. "Investors know what's going on with the economy, so it's priced into the market."
In its statement, the Fed said weakness will remain for a bit but a combination of government action, stimulus and market forces "will contribute to a strengthening of economic growth."
The central bank has kept rates low and injected trillions of dollars into the economy in an effort to offset the recession's impact.
The Fed's statement singled out strength in a few sectors, including housing and consumer spending, and it noted that while the labour market continued to lose ground, the pace was slowing.