Stocks up after Fed leaves rates unchanged NEW YORK (AP) - Wall Street gained some upward momentum Wednesday, rising after the Federal Reserve left interest rates unchanged and issued a mixed but unsurprising assessment of the economy. The Fed pointed to some positive signs in the economy, including “some firming in household spending.” But it also said persistently rising energy prices are likely to limit growth - and not just quicken inflation, which also remains a major concern for the central bank. The central bank said after a two-day meeting it is keeping the benchmark federal funds rate at 2 percent. The hold was expected, after several speeches by Fed officials suggesting that inflation is becoming a bigger worry for policy makers. It was the first time in 10 months that the central bank did not cut rates - last summer, the key rate was above 5 percent. “If there is no dramatic uptick in unemployment, no dramatic pullback in GDP (gross domestic product) - which is still positive right now - I think the Fed is setting the stage for a rate hike. Nonetheless, they've left the window open for a cut if need be,” said Quincy Krosby, chief investment strategist for The Hartford. The U.S. central bank is at a critical turning point, she said. There are still big credit troubles at the nation's major banks, the job market has been deteriorating for several months, and home prices are still tumbling; to raise rates prematurely could cause these trends to worsen further. “The goal of the central banks is to get us through this as smoothly as possible, but this is not a science; it is an art form,” Krosby said. “This is as delicate as it gets.” In midafternoon trading, the Dow Jones industrial average rose 107.72, or 0.91 percent, to 11,915.15. The index rose from its levels before the Fed announcement but moved erratically; there is often some give and take in trading after a rate decision as the market parses the central bank's statement. Broader stock indicators were also higher. The Standard & Poor's 500 index rose 20.43, or 1.55 percent, to 1,334.72, and the Nasdaq composite index rose 50.84, or 2.15 percent, to 2,419.12. Government bond prices stayed lower. The yield on the 10-year Treasury note, which moves opposite its price, was at 4.13 percent, up from 4.10 percent late Tuesday. Crude oil fell $2.41 to $134.59 a barrel on the New York Mercantile Exchange. Gold prices also fell, while the dollar fell against most other major currencies. Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 933.9 million shares. The Russell 2000 index of smaller companies rose 12.33, or 1.74 percent, to 720.25. Overseas, Japan's Nikkei stock average slipped 0.14 percent. Britain's FTSE 100 rose 0.56 percent, Germany's DAX index added 1.25 percent, and France's CAC-40 rose 1.40 percent. --- On the Net: New York Stock Exchange: http://www.nyse.com Nasdaq Stock Market: http://www.nasdaq.com |