NEW YORK (AP) — Stocks were holding onto their gains Wednesday afternoon after the Federal Reserve announced it would keep interest rates low. The market is bouncing back after a four-day losing streak.
KEEPING SCORE: The Dow Jones industrial average rose 60 points, or 0.3 percent, to 17,736 as of 2:45 p.m. The Standard & Poor’s 500 index rose eight points, or 0.4 percent, to 2,083 and the Nasdaq composite rose 19 points, or 0.4 percent, to 4,862.
ON HOLD: As expected, the Federal Reserve’s policymakers voted to keep interest rates unchanged at their current level of 0.25 percent to 0.50 percent. In their statement, the Fed said that while U.S. economic activity continues to strengthen “the pace of improvement in the labor market has slowed,” a reference to the April and May job reports that were weaker than anticipated.
“After that May jobs report, I think today’s decision was a fait accompli,” said Kristina Hooper, head of U.S. investment strategies at Allianz Global Investors, after the decision was announced. “They needed to hit the pause button for June, but I think a July rate hike still remains a distinct possibility.”
Stocks held on to their gains after the Fed decision was announced, and bond prices remained high, keeping yields low. Bond yields are tied to interest rates on many kinds of loans including mortgages.
BRITISH DRAMA: Most investors are focused on the other side of the Atlantic at the moment. There is grave uncertainty about whether British voters will choose to leave the European Union in a June 23 referendum. Polls show the vote could go either way and investors are starting to worry about the consequences.
A British exit from the EU, known informally as Brexit, would likely hurt the British economy most and destabilize the rest of Europe. The repercussions, however, are not clear and investors are reacting to the general uncertainty over the situation.
During her press conference, Yellen said Fed policymakers said the upcoming vote was one of the reasons why the central bank kept interest rates unchanged.
WHOLE FOODS SLIDES: Whole Foods Market fell $1.55, or 5 percent, to $30.97 after the Food and Drug Administration said there were “serious violations” at a kitchen in Massachusetts that may have resulted in contaminated food and the grocery chain hasn’t done enough to fix them so far.
ENERGY: Benchmark U.S. crude oil fell 48 cents to close at $48.01 a barrel in New York. The price has fallen 6.3 percent over the last five days. Brent crude, used to price international oils, fell 86 cents to close at $48.97 a barrel in London.
In other energy commodities, wholesale gasoline futures fell 2 cents to $1.50 a gallon, heating oil closed down 2 cents to $1.48 a gallon and natural gas fell 1 cent to $2.595 per 1,000 cubic feet.
BONDS, CURRENCIES: Bond prices continued to rise after the Fed meeting and ahead of the Brexit vote. The yield on the 10-year U.S. Treasury note fell to 1.59 percent from 1.61 percent a day earlier. The dollar fell to 105.91 yen from 105.97 yen. The euro edged up to $1.1272 from $1.1205.
METALS: Gold prices rose 20 cents to $1,288.30 an ounce. Silver rose 8 cents to $17.50 an ounce and copper closed up five cents to $2.091 a pound.