USA stocks on Friday opened slightly lower, taking a pause after three straight days of gains as investors cheered the Federal Reserve’s decision to leave interest rates unchanged earlier this week.
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In early trading, the Dow Jones Industrial Average was up 132.52 points, or 0.72 per cent, at 18,426.22. The S&P 500 index added 14 points, or 0.7%, to finish at 2,177.
The S&P 500 posted 7 new 52-week highs and 1 new low; the Nasdaq Composite recorded 88 new highs and 13 new lows.
The newly created real estate component of the S&P 500 climbed 1.9 percent, far more than any other sector. The Nasdaq composite climbed 33 points, or 0.6 percent, to 5,325. The stock gave the S&P 500 and the Nasdaq their biggest boost.
Rosengren dissented at this week’s Federal Reserve rate- setting meeting that left interest rates unchanged at a range of 0.25 to 0.50 percent.
However, the economic releases following the address weren’t very supportive of a rate hike, dousing expectations.
The US central bank said it made the decision due to recent weak economic data and tepid inflation.
The low-inflation, low-rate environment also has led the Fed to view the risks around raising rates as asymmetric, with raising rates too soon far more risky than raising them too late.
Rosengren has previously warned about the rapid rise of commercial real estate prices in the United States, which he argues could deepen a downturn if the USA economy is hit by a negative shock. Diamond Offshore rose 3 percent.
In the bond market, benchmark U.S. yields hit near two-week lows on revived bets the Fed would raise interest rates slowly due to weak economic growth and inflation stuck below its 2% goal. The Fed said that it held off on raising rates “for the time being” until there is more evidence that the USA economy is improving and the labour market is on the upturn.
ENERGIZED: Energy companies rose, following oil prices.
While infrastructure investment in many areas has been languishing, one small piece of the market has seen significant growth: The number of municipal bonds issued specifically to fund environmentally beneficial capital projects in 2015 was $4.7 billion, an increase of 47 percent over the previous year, according to a report by HSBC and the Climate Bonds Institute.
Investors have been in risk-on mode again, encouraged by the Federal Reserve’s decision to stand pat on interest rates at a meeting this week. The contract rose 98 cents to settle at $46.32 a barrel on Thursday.
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PULLED A RABBIT: Open source software company Red Hat rose $2.70, or 3.5 percent, to $79.74 after the company reported better than expected results in its second quarter.
