Markets Right Now: Stocks wobble after Fed, but close higher

Markets Right Now: Stocks wobble after Fed, but close higher

USA stocks looked set to open slightly lower on Thursday, a day after the Federal Reserve signaled it could raise interest rates for the third time this year despite low inflation and disclosed plans to shrink its balance sheet.

Investors were pricing in about a 70 percent chance of a December hike, according to CME's FedWatch tool, up from about 51 percent just prior to the Fed statement. Tata shares rose 1.7 percent. Spot gold may break support at $1,299 per ounce and fall more towards the next support level at $1,281, said Reuters technicals analyst Wang Tao.

However, Hong Kong edged up 0.2 percent in the afternoon and Shanghai closed 0.3 percent higher.

The Dow Jones is up over ten points at 22,380, while the Nasdaq is down nearly 12 at 6,449.

The Fed announced Wednesday that it will let a small portion of its $4.5 trillion balance sheet mature without being replaced, starting in October with reductions of $10 billion a month and gradually rising over the next year to $50 billion a month.

Energy stocks fell broadly while telecommunications and IT firm TPG Telecom fell as much as 6.7%. Income-seeking investors find those stocks less appealing when bond yields move higher.

Best Buy fell 8 percent after the No. 1 US electronics retailer forecast fiscal 2021 adjusted earnings well below Wall Street estimates.

That said, the accompanying statement may offer the details of how the central bank plans to start shrinking its USD4.5 trillion balance sheet. Zions Bancorporation climbed 70 cents, or 1.6 percent, to $45.11. At the start of the year, they were closer to 2.5 percent.

The Nikkei 225 from Japan recovered from previous trading lower and closing up by 2% on Tuesday while South Korea's Kospi lost 0.05%.

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The kiwi dollar was little changed at 91.29 Australian cents from 91.25 cents.

USA stock indexes were mostly higher in midday trading ahead of the Federal Reserve's latest economic and interest rate policy update.

In unsurprising news on the corporate front, American memory giant Western Digital said it would begin arbitration against Toshiba, after the Japanese tech conglomerate announced it would sell its memory chip division to a consortium led by Bain Capital in a deal worth JPY 2trn on Wednesday.

Energy shares gained after USA oil prices finished above $50 a barrel for the first time since late July.

Bed Bath & Beyond sank more than 16 percent after the home furnishing retailer reported earnings and sales below estimates, prompting a slew of price target cuts. After pushing the S&P above its 2,500-point milestone last week, investors were holding their fire as they awaited more clues on the timing of the next rate hike from Fed Chair Janet Yellen. The Dow rose 0.2% while the S&P 500 and the Nasdaq Composite inched up around 0.1% each. The Dow gained 63.01 points, or 0.3 percent, to 22,331.35.

USA crude futures rose 2 cents to settle at US$49.91, while Brent crude futures fell 14 cents to US$55.48.

However, Asian shares traded to a ten-year high on Monday in anticipation of the upcoming Federal Reserve meeting. The cereal maker slid $3.21, or 5.8 percent, to $52.17. London's FTSE 100 added 0.4 percent to 7,246.

In Europe, Germany's DAX rose 0.1 percent, while the CAC 40 in France added 0.1 percent.