NEW YORK (AP) — Stocks continued to swing between gains and losses Thursday after the Federal Reserve announced it would not raise interest rates, citing lingering concerns about weakness in the global economy and unstable financial markets.
Bond prices rose sharply, sending yields lower, as the Fed said inflation would likely remain in check. The dollar fell against other currencies as traders anticipated that U.S. rates would remain low for some time.
KEEPING SCORE: The Dow Jones industrial average lost 23 points, or 0.2 percent, to 16,712 as of 3:45 p.m. Eastern. The Dow had been up as much as 193 points in late afternoon trading.
The Standard & Poor’s 500 index fell 2 points, or 0.9 percent, to 2,013 and the Nasdaq composite added 16 points, or 0.4 percent, to 4,906. Bond prices rose. The yield on the 10-year Treasury note fell to 2.20 percent from 2.30 percent late Wednesday.
FED STANDS PAT: Fed policymakers, wrapping up a two-day meeting, voted to keep U.S. interest rates at record lows. The Fed said that while the U.S. job market is solid, there are reasons to be concerned about global economic growth.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the Fed said in its statement.
Interest rates have been near zero since 2008 in response to the financial crisis and Great Recession. The last time the central bank actually raised rates was 2006.
“They just need a little more time,” said Tony Bedikian, head of global markets at Citizens Financial Group. “The drumbeat is getting louder for them to actually raise rates.”
The low rates have kept borrowing costs inexpensive in an effort to stimulate borrowing and lending. They have also encouraged investors to put money into the stock market by making the returns on bonds and other interest-bearing investments less appealing.
ANALYST’S TAKE: “The market got what it wanted,” said Alan Rechtschaffen, a portfolio manager at UBS. “The market had a ‘rate rant’ last month and that scared the Fed.”
NOW WHAT? Since the Fed kept interest rates near zero, the chances of them raising interest rates this year have fallen. There are only two more meetings this year for Federal Reserve policymakers, in October and December.
October is still a meeting where the Fed could raise rates. Securities that allow investors to bet on which way the Fed will move interest rates are pricing in a one-in-three chance of a rate hike then.
CURRENCIES: The dollar fell against other currencies after the Fed said it would keep interest rates low for the time being. An interest rate increase would have sent the dollar higher. The euro rose 1.3 percent to $1.1431 and the dollar fell 0.5 percent to $120 Japanese yen.
PAY-PER-VIEW: Cablevision, a New York-area cable TV provider, jumped $4.22, or 15 percent, to $32.75 after agreeing to be bought by the European cable company Altice. The merger would create the fourth-largest cable company in the U.S.
DIAL TONE: Verizon slumped 95 cent, or 2 percent, to $45.26 after the communications company said its earnings may be flat this upcoming year.
ENERGY: U.S. benchmark crude edged down 25 cents to close at $46.90 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, fell 67 cents to $49.08 a barrel in London. Oil prices had surged the day before.
METALS: The price of gold fell $2 to settle at $1,117 an ounce in regular trading, before the Fed released its policy statement. In extended trading, gold moved up $11.30 to $1,130.30 an ounce.
Silver added 10 cents to settle at $14.98 an ounce, and gained another 25 cents to $15.13 in extended trading. Copper closed regular trading unchanged at $2.45 a pound. In extended trading it was up two cents at $2.47 a pound.
First Published: September 17, 2015, 7:51 p.m.
