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Wall Street falls as Fed signals two more hikes this year

Reuters 

By Caroline Valetkevitch

(Reuters) - U.S. stocks ended a choppy session lower on Wednesday after the raised interest rates as expected and projected a slightly faster pace of rate hikes this year.

Two more hikes are now expected by the end of this year, compared with one previously.

The central bank, which raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, also dropped its longstanding pledge to stimulate the "for some time."

Stocks were volatile after the statement but ended near the lows of the session, and selling was broad-based, with most sector indexes ending lower. The <.VIX> rose.

"The expectation now is for four rate increases in total in 2018. Consensus had been more like three, moving towards four, so I think that's a bit of a surprise," said Katie Nixon, at in

"It seems as if the Fed is much more confident now in reaching, in fact maybe breaching a little bit, their target, so they are pulling forward some of the rate increases."

Fresh projections from policymakers suggested that would run above the Fed's 2 percent target, hitting 2.1 percent this year and remaining there through 2020.

The Dow Jones Industrial Average <.DJI> fell 119.53 points, or 0.47 percent, to 25,201.2, the 500 <.SPX> lost 11.22 points, or 0.40 percent, to 2,775.63 and the <.IXIC> dropped 8.10 points, or 0.11 percent, to 7,695.70.

financials <.SPSY>, which tend to benefit from rising interest rates, ended down 0.3 percent.

"The financials are a bit of a puzzle. There's always a lag between the increases in deposit rates and fund costs and interest on loans," said Robert Eisenbeis, at Cumberland in Sarasota,

"There's some processing and digesting going on."

Traders of U.S. short-term interest-rate futures increased bets the Fed will raise rates again this year and next after the Fed's statement.

A ruling Tuesday that approved Inc's $85 billion deal to buy put the spotlight on and telecom shares, which mostly rose.

Shares of channel owner Time Warner rose 1.8 percent. dropped 6.2 percent in its highest volume day ever, sending the services index <.SPLRCL> down 4.5 percent.

Shares of other telecom and companies such as , and Discovery Inc ended higher.

After the bell, Comcast Corp offered $65 billion for Twenty-First Century Fox Inc assets. Twenty-First Century Fox shares were up 0.2 percent in after-hours trading, after closing the regular session up 7.7 percent. Comcast shares ended the session down 0.2 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio

The posted 40 new 52-week highs and two new lows; the recorded 151 new highs and 24 new lows.

About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 6.7 billion daily average for the past 20 trading days, according to Thomson data.

(Reporting by Caroline Valetkevitch; Additional reporting by Lewis Krauskopf in New York and Sruthi Shankar in Bengaluru; Editing by Meredith Mazzilli and Lisa Shumaker)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 03:12 IST
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