US stocks end with modest gains

Fed signals gradual tightening and keeps interest rates unchanged

U.S. stocks ended Wednesday's choppy session with modest gains on 17 June 2015 after the Federal Reserve left key interest rates unchanged and as Fed Chairwoman Janet Yellen reiterated policy makers' commitment to watch economic data. Yellen emphasized the importance of the pace and trajectory of rate hikes, saying the timing of the initial hike is less important. Furthermore, the Fed lowered its 2015 GDP growth forecast range to 1.8-2.0% from the range of 2.3-2.7% that was forecast in March.

The main indices switched between gains and losses, but eked out modest gains by the session's end. The S&P 500 rose 4.15 points, or 0.2%, to 2,100.44. The Dow Jones Industrial Average gained 31.26 points, or 0.2%, to 17,935.74. The Nasdaq Composite added 9.33 points, or 0.2%, to 5,064.88.

Stocks struggled for direction immediately after the release, but rallied to highs during Chair Janet Yellen's press conference, which was viewed as dovish. To that point, Ms. Yellen said the central bank would like to see more "decisive evidence" on inflation and employment before hiking rates.

Commodities have been under pressure due to recent rate-hike expectations, as higher interest rates increase the cost of storing commodities, and make it less attractive for investors seeking better returns across assets.

The Fed said it still expects its benchmark fed funds interest rate to rise to 3.75% in the longer run, but the central bank also indicated that the pace of rate hikes will be slower.

During the news conference, Fed Chairwoman Janet Yellen said the bank will be extremely patient in raising interest rates over the next 2 years.

European stock markets were lower again on Wednesday amid worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. The European Central Bank on Wednesday authorized more emergency loan money to Greece. Greece-EU debt negotiations broke down on Sunday.

Bullion prices ended lower aat Comex on Wednesday, 17 June 2015. Gold futures settled lower after the Federal Reserve moved closer to its first interest-rate increase in almost decade, but also indicated that the pace of the increases may be slower. The Federal Reserve held rates steady on Wednesday, while signaling as many two rate hikes before the end of the year.

Gold for August delivery fell $4.10, or 0.4%, to settle at $1,176.80 an ounce on Comex, ahead of the Fed news. July silver shed 1.8 cents, or 0.1%, to settle at $15.947 an ounce for the regular session, before the Fed news.

U.S. oil prices settled with a loss on Wednesday, 17 June 2015 mostly recovering from the dive they took in the wake of a weekly report that showed an unexpected climb in gasoline inventories and a sizable increase in stockpiles at the futures delivery hub in Oklahoma.

July crude fell 5 cents to settle at $59.92 a barrel on Nymex. It was trading at $61.13 before the supply data and touched lows under $59 after them. A price recovery in the last half-hour of trading coincided with the Fed statement.

Early Wednesday, the U.S. Energy Information Administration reported a decline of 2.7 million barrels in crude supplies for the week ended 12 June 2015. EIA data have now shown seven straight weeks of falling supplies. Market had forecast a crude-stock fall of 2.4 million barrels. Total domestic production fell 21,000 barrels a day from a week earlier, to 9.59 million barrels a day. The EIA data also showed that gasoline supplies unexpectedly climbed by 500,000 barrels, while distillate stockpiles rose by a less-than-expected 100,000 barrels last week.

Today's participation was relatively light with roughly 700 million shares changing hands at the NYSE floor.

Economic data was limited to the weekly MBA Mortgage Index, which fell 5.5% to follow last week's 8.4% increase.

Tomorrow, weekly Initial Claims (consensus 276K), May CPI (consensus 0.5%), and Q1 Current Account Balance (expected -$116.70 billion) will all be reported at 8:30 ET while May Leading Indicators (expected 0.4%) and the Philadelphia Fed Survey for June (consensus 8.0) will be reported at 10:00 ET.

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