Stocks closed sharply higher Wednesday, reversing earlier declines after Federal Reserve policy-makers signaled they were in no hurry to raise U.S. interest rates. All 10 industry sectors in the S&P 500 finished with big gains, led by energy and utility stocks after crude oil returned to positive ground following the post-Federal Open Markets Committee meeting policy statement. Financial stocks were the relative laggards, rising just 0.5% as a group as investors now see the Fed holding off until July or later before raising borrowing costs.
“Just because we removed the word ‘patient’ from our (policy) statement doesn’t mean we’re going to be impatient about interest rates,” Fed Chair Janet Yellin said early in her post-meeting news conference this afternoon.
Yellin said she and other FOMC members expect a rising dollar to continue weighing on U.S. exports while slowing overall economic growth. The panel today also trimmed its inflation outlook, suggesting they don’t expect rapidly rising prices to force their hand on interest rates.
“We need to watch the data and continually reformulate” forecasts, Yellen said. “We can’t provide certainty and shouldn’t provide certainty because economic developments are uncertain.”
Crude oil for April delivery settled $1.20 higher, reversing earlier declines, at $44.66 per barrel while April natural gas futures rose 7 cents to $2.92 per 1 million BTU. April gold also surged as the dollar dropped, settling $3.1 higher at $1,151.30 per ounce. Gold futures were extending those gains in electronic trade, recently jumping over $24 per ounce to $1,172.40.
Here’s where the U.S. markets stood at the end-of-day:
Dow Jones Industrial Average up 227.11 (+1.27%) to 18,076.19
S&P 500 up 25.14 (+1.21%) to 2,099.42
Nasdaq Composite Index up 45.39 (+0.92%) to 4,982.83
Hang Seng Index up 0.91%
Shanghai China Composite Index up 2.13%
FTSE 100 Index up 1.46%
(+) VTSS, Agrees to $389 mln buyout from Microsemi ( MSCC ), which plans for a $5.28 per share cash tender offer. MSCC also was higher, saying deal will boost FY15 EPS by $0.16 to $0.20. VTSS receives 21-day “go-shop” period to pursue better offer.
(+) RTRX, Regulators clear Cholbam capsules for U.S. sales, the first treatment approved in this country for pediatric and adult patients with bile acid synthesis disorders and peroxisomal disorders.
(+) NVGN, Said its Anisina (ATM-3507) oncology pipeline drug reached a major milestone, with testing confirming its anti-cancer ability in children who had developed neuroblastoma.
(-) WG, Delays filing its 10-K annual report, explaining it does not expect to be in compliance with its maximum leverage ratio as well as its minimum interest coverage ratio during the 12 months ending March 31, 2016.
(-) SQM, Three board members affiliated with Canadian fertilizer company Potash (POT,POT.TO) quit without giving reasons for the moves although Chilean authorities are investigating SQM and other companies for alleged bribes to government leaders.
(-) NKTR, NKTR-102 drug candidate fails to improve median overall survival rates in patients with breast cancer by a statistically significant amount.
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