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Energy stocks, Facebook help Wall Street higher ahead of Fed decision

22 March, 2018, 02:13 | Author: Shawna Walton
  • Reuters

The U.S. dollar slid against major currencies, bond yields slipped, and stocks were mostly steady on Wednesday after the Federal Reserve raised its policy interest rate, and noted economic growth was strengthening, but left markets expecting only three rate rises this year.

That has left investors on edge as the Federal Reserve prepares to raise USA rates for the first time this year after a two-day policy meeting.

Markets participants are still trying to decipher the number of rate hikes this year - whether the Fed will stay at three increases as previously forecast by policy makers, or whether a fourth hike is possible.

Gains were however, limited as shares of Facebook extended their losses from Monday and fell 5.2% on reports that US Federal Trade. The S&P 500 lost 2.56 points, or 0.09 percent, to 2,714.38.

"It's a general pullback in risk and technology tends to have a higher impact on the market". The U.S. dollar index, which tracks the greenback versus a basket of six currencies, fell 0.693 points or 0.77 percent, to 89.678, its steepest one-day drop since January 24 when it fell 1.0 percent.

The Fed is widely seen raising its benchmark interest rate by 25 basis points when it concludes the first meeting of the Jerome Powell era at 2:00 p.m. ET.

China, according to the Wall Street Journal, was planning counter-measures with tariffs aimed at US agricultural exports from Farm Belt states.

A pan-European equity index fell nearly 0.3 percent, its early weakness accelerating after the WSJ report on China and a tech shares index reversing an early bounce.

The energy index.SPNY jumped 2.76 percent as crude oil prices hit a six-week high after a surprise decline in US inventories and as concern persisted over possible disruption to Middle East supply.

Crude oil prices jumped more than 2 percent to $63 per barrel.

Shares of Twitter plunged, down 10.3 percent as of 2.22pm in NY, amid concern about increased scrutiny of social media companies and a Bloomberg report that Israel's government is considering taking "legal action" against Twitter for ignoring repeated requests to remove online content that was inciting or supportive of terrorism.

"Our base case is the Fed would raise four times this year, and that would not have a material impact to the equity markets to the upside", Josh Navarro, global investment specialist at JP Morgan Private Bank, told Reuters.

As a result shares in soybean exporter Archer-Daniels (ADM.N) fell 1 percent and Bunge (BG.N) dropped 0.7 percent.

Netflix and Amazon, however, rose with 1.28% and 2.69%, respectively.

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