US--WallStreet
Stocks closed mostly higher Wednesday after the Federal Reserve said the economy was on the mend and the Commerce Department reported an unexpected increase in orders for big-ticket manufactured items.
The Dow Jones industrials fell modestly, but broader market measures ended the day with gains.
Yields on government bonds rose after the Fed said it wouldn’t step up its purchases of Treasuries and mortgage bonds to push interest rates lower.
The central bank’s decision to leave its key lending rate near zero was anticipated, but some investors had hoped the central bank would do more to help revive the economy. Others wanted the Fed to lay out more clearly how it would keep inflation in check.
“The Fed is still stuck on that tightrope of trying to make sure they provide enough reassurance to keep the recovery going but at the same time trying to allay the concern that they won’t allow inflation to get going either,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
The Dow fell 23.05 points, or 0.3%, to 8,299.86. In the last four days the 30-stock average is down 3%.
But the S&P; 500 index rose 5.84 points, or 0.7%, to 900.94. The Nasdaq composite index rose 27.42 points, or 1.6%, to 1,792.34 after Oracle reported better-than-expected earnings late Tuesday.
The Russell 2,000 index of smaller companies rose 1.1%.
About two stocks rose for every one that fell on the New York Stock Exchange.
The yield on the benchmark 10-year Treasury note rose to 3.68% from 3.63% on Tuesday.
Before the Fed announcement, the yield was lower after bonds drew strength from a successful government auction of $37 billion in five-year notes.
Although Treasury auctions have gone smoothly this year, investors have been looking for signs that demand for new federal debt might be waning.
If demand trails off, the government will have to raise yields sharply to attract buyers. Treasury yields are closely tied to borrowing rates for consumers on loans such as mortgages.
In other market highlights:
* Oracle jumped 7% after its earnings exceeded what analysts had forecast on average.
* Oil futures fell 57 cents to settle at $68.67 a barrel on the New York Mercantile Exchange.
* The dollar was mixed against other major currencies. Gold prices rose.
* Overseas, key stock indexes rose 1.2% in Britain, 2.7% in Germany, 2.2% in France and 0.4% in Japan.
