Wall Street sinks after Fed gives mixed signals on next move

By Noel Randewich (Reuters) - Wall Street sank on Wednesday when Federal Reserve policy makers gave mixed signals about their next move after cutting interest rates by a quarter of a percentage point in a widely expected move. With continued economic growth and strong hiring 'the most likely outcomes,' the Fed nevertheless cited 'uncertainties' about the outlook and pledged to 'act as appropriate' to sustain the expansion. New projections showed policymakers at the median expected rates to stay within the new range through 2020, bad news for investors hoping for additional cuts to help blunt economic fallout from the U.S.-China trade.

Reuters September 19, 2019 02:07:13 IST
Wall Street sinks after Fed gives mixed signals on next move

Wall Street sinks after Fed gives mixed signals on next move

By Noel Randewich

(Reuters) - Wall Street sank on Wednesday when Federal Reserve policy makers gave mixed signals about their next move after cutting interest rates by a quarter of a percentage point in a widely expected move.

With continued economic growth and strong hiring "the most likely outcomes," the Fed nevertheless cited "uncertainties" about the outlook and pledged to "act as appropriate" to sustain the expansion.

New projections showed policymakers at the median expected rates to stay within the new range through 2020, bad news for investors hoping for additional cuts to help blunt economic fallout from the U.S.-China trade.

"The main concern (for stock investors) is there might not be another cut, and that's why you had a little bit of a selloff," said Alan Lancz, President of Alan B. Lancz and Associates in Toledo, Ohio. "But it's almost like selling on good news. They left the door open for more cuts. It's a really divided Fed right now."

Expectations of lower rates have supported Wall Street's rally this year, with the benchmark S&P 500 <.SPX> less than 2% below its record high close in July.

At 2:21 pm ET, the Dow Jones Industrial Average <.DJI> was down 0.63% at 26,940.15 points, while the S&P 500 <.SPX> lost 0.72% to 2,984.16.

The Nasdaq Composite <.IXIC> dropped 1.02% to 8,102.75.

Ahead of the Fed's announcement, the S&P 500 had been down about 0.3%.

Ten of the 11 major S&P sectors were in the red, with the S&P utilities index <.SPLRCU> up 0.1% and alone among gainers.

The central bank also widened the gap between the interest it pays banks on excess reserves and the top of its policy rate range, a step taken to smooth out problems in money markets that prompted a market intervention by the New York Fed this week.

FedEx shares tumbled 13.9% and were on course for their sharpest one-day percentage drop since the financial crisis after the company blamed U.S.-China trade tensions and a split with Amazon.com Inc for its dismal full-year profit forecast.

Roku slumped 13.9 after Comcast said it will offer its own streaming media set top box for free to its U.S. internet-only customers.

Declining issues outnumbered advancing ones on the NYSE by a 1.84-to-1 ratio; on Nasdaq, a 2.10-to-1 ratio favoured decliners.

The S&P 500 posted 17 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 39 new highs and 29 new lows.

(Additional reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Nick Zieminski and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Greek police clash with protesters in rally against mandatory vaccinations
World

Greek police clash with protesters in rally against mandatory vaccinations

ATHENS (Reuters) - Greek police used teargas and water cannon to disperse people who had gathered in central Athens on Saturday to protest against mandatory COVID-19 vaccinations. More than 4,000 people rallied outside the Greek parliament for a third time this month to oppose mandatory inoculations for some workers, such as healthcare and nursing staff.

Two Turkish soldiers killed in attack in northern Syria
World

Two Turkish soldiers killed in attack in northern Syria

ISTANBUL (Reuters) - Two Turkish soldiers were killed and two were wounded in an attack on their armoured vehicle in northern Syria, and Turkish forces immediately launched retaliatory fire, Turkey's defence ministry said on Saturday. "Our punitive fire against terrorist positions is continuing," the statement on Twitter on said. It did not specify where the attack occurred, but media reports said it was in the al-Bab area.

Brazilians take to streets again to demand Bolsonaro's impeachment
World

Brazilians take to streets again to demand Bolsonaro's impeachment

By Marcelo Rochabrun SAO PAULO (Reuters) - Protesters took to the streets in several Brazilian cities on Saturday to demand the impeachment of far-right President Jair Bolsonaro, whose popularity has fallen in recent weeks amid corruption scandals against the backdrop of the pandemic. This week, news broke that Brazil's defense ministry told congressional leadership that next year's elections would not take place without amending the country's electronic voting system to include a paper trail of each vote. Bolsonaro has suggested several times without evidence that the current system is prone to fraud, allegations that Brazil's government has denied