Major Averages Finish The Day Mixed Following Fed Statement - U.S. Commentary

(RTTNews) - While stocks largely recovered from an early move to the downside, the tech-heavy Nasdaq remained stuck in negative territory. The Dow and the S&P 500 managed to finish the session moderately higher.

The Nasdaq slid 25.14 points or 0.5 percent to 4,863.14, while the Dow rose 51.23 points or 0.3 percent to 18,041.55 and the S&P 500 edged up 3.45 points or 0.2 percent to 2,095.15.

The mixed close by the major averages came following the Federal Reserve's monetary policy announcement, which did not contain any major surprises.

As was widely expected, the Fed left its target range for the federal funds rate unchanged at 0.25 to 0.5 percent for the third straight meeting.

The central bank's accompanying statement was generally interpreted as leaving the door open for a June rate hike without making any guarantees.

Many analysts cited the Fed's decision to remove a reference to the risks posed by global economic and financial developments.

The Fed also said recent data indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed.

The central bank also reiterated that the actual path of rates will depend on the economic outlook as informed by incoming data.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The omission of the warning about global risks leaves the door open to a June rate hike, but whether the Fed follows through will depend on what happens in financial markets over the next six weeks."

The decrease by the Nasdaq was partly due to a steep decline by shares of Apple (AAPL), which tumbled by 6.3 percent to a nearly two-month closing low.

After the close of trading on Tuesday, Apple reported weaker than expected second quarter results amid its first-ever drop in iPhone sales.

Meanwhile, traders were also reacting to an increase by the price of crude oil, with crude for June delivery jumping $1.29 to a nearly six-month closing high of $45.33 a barrel.

The price increase came after a report from the Energy Information Administration showed a smaller than expected increase in crude oil stockpiles last week.

Sector News

Energy stocks moved sharply higher over the course of the trading session, benefiting from the increase by the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index surged up by 3.4 percent and 3.2 percent, respectively. The NYSE Arca Oil & Gas Index also climbed by 1.4 percent.

Significant strength was also visible among steel stocks, as reflected by the 2.3 percent gain posted by the NYSE Arca Steel Index. Universal Stainless (USAP) posted a standout gain after reporting its first quarter results.

Utilities stocks also turned in a strong performance on the day, driving the Dow Jones Utilities Average up by 1.5 percent. The average closed higher for the fourth straight day after falling sharply in the middle of last week.

Gold, semiconductor, networking and stocks also saw notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.6 percent.

In the bond market, treasuries moved notably higher, regaining ground after trending lower in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slumped by 7.1 basis points to 1.860 percent.

Looking Ahead

Trading on Thursday may continue to be impacted by reaction to the Fed statement, although reports on first quarter GDP and weekly jobless claims are also likely to attract attention.

On the earning front, Facebook (FB), Marriott (MAR), PayPal (PYPL), and Texas Instruments (TXN) are among the companies releasing their quarterly results after the close of today's trading.

Bristol-Myers (BMY), Colgate-Palmolive (CL), ConocoPhillips (COP), Dow Chemical (Dow), Ford (F), MasterCard (MA), and UPS (UPS) are also due to report their results before the start of trading on Friday.