U.S. stocks continued to rise Wednesday as Wall Street assessed the Federal Reserve's statement released in the afternoon. The Dow Jones Industrial Average added 121.12 points, or 0.69 percent, to 17,751.39.
The S&P 500 gained 15.32 points, or 0.73 percent, to 2,108.57. The Nasdaq Composite Index rose 22.53 points, or 0.44 percent, to 5,111.73. According to the statement, information received since the Federal Open Market Committee (FOMC), the policy-setting arm of the Fed, met in June indicates that economic activity has been expanding moderately in recent months.
To support continued progress toward maximum employment and price stability, the FOMC reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate.
In determining how long to maintain this target range, the FOMC will assess progress -- both realized and expected -- toward its objectives of maximum employment and 2 percent inflation. "(The statement showed) that the past 6 weeks data pushed the FOMC a little closer to raising rates, but they are still waiting for more good news before they actually pull the trigger," said Chris Low, chief economist at FTN Financial, in a note.
On the economic front, after five consecutive months of increases, U.S. pending home sales slipped in June but remained near May's level, which was the highest in more than nine years, according to the National Association of Realtors. The Pending Home Sales Index fell 1.8 percent to 110.3 in June but is still 8.2 percent above June 2014 reading.
In corporate news, shares of Twitter plunged 14.50 percent to 31.24 dollars apiece Wednesday following the release of its quarterly results, as tepid user growth and ongoing uncertainty about its leadership weighed on investor sentiment. Twitter, Inc. reported revenue of 502 million U.S. dollars for the second quarter of 2015, up 61 percent year on year.
The company had 316 million monthly active users in the second quarter on average, up less than 3 percent from the previous three months. "Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience," said Jack Dorsey, interim CEO of Twitter, in a statement.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, decreased 6.99 percent to end at 12.50 Wednesday. In other markets, oil prices increased as a government report showed U.S. crude stockpiles unexpectedly fell last week.
The West Texas Intermediate for September delivery moved up 81 cents to settle at 48.79 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery increased 8 cents to close at 53.38 dollars a barrel on the London ICE Future Exchange.
The U.S. dollar increased against most major currencies as the newly-released Fed statement showed optimism on the country's labor market, bolstering market speculation for an interest-rate hike by the year-end.
In late New York trading, the euro declined to 1.1006 dollars from 1.1048 dollars in the previous session, while the dollar bought 123.94 Japanese yen, higher than 123.61 yen of the previous session.
Gold futures on the COMEX division of the New York Mercantile Exchange fell as the U.S. dollar showed strength ahead of the press conference about the Fed's interest rates. The most active gold contract for August delivery lost 3.6 dollars, or 0.33 percent, to settle at 1,092.60 dollars per ounce.
Latest comments