Page 25 - ARUBA TODAY
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BUSINESS A25
Thursday 22 March 2018
Trader Timothy Nick, center, and specialist Robert Tuccillo, right, work on the floor of the New York
Stock Exchange, Wednesday, March 21, 2018. U.S. stocks are mixed Wednesday morning as in-
vestors wait for news on interest rates from the Federal Reserve.
(AP Photo/Richard Drew)
Stocks dip after Fed raises interest rates
By MARLEY JAY "The market will have to cent Tuesday. It had risen
get to know Jerome Pow- as high as 2.93 percent as
AP Markets Writer ell a little bit and will have investors expected quicker
to test his credibility as Fed gains in interest rates.
NEW YORK (AP) — After a chairman," he said. "I would David Kelly, the chief glob-
imagine the bar is higher al strategist for JPMorgan
jittery afternoon of trading, for him in the shorter term Asset Management, said
because he is not a trained stocks usually do well when
major U.S. stock indexes fell economist," unlike Janet rates are rising, but only up
Yellen and other predeces- to a point.
Wednesday while smaller sors. "If interest rates are rising
Small and mid-size com- from a low level, there's
companies fared better. panies climbed. Energy more optimism about the
companies led the way economy, and that gen-
The Federal Reserve raised as oil prices jumped for erally is a more positive
the second day in a row. thing," he said. That's the
interest rates, as inves- Homebuilders advanced case right now, but with an
following a report that sales important difference: the
tors expected, and said it of previously occupied economy has been grow-
homes increased in Febru- ing for almost a decade,
could raise rates at a quick- ary. Cereal and packaged and interest rates have
foods companies slumped been historically low for the
er pace next year. after General Mills reported whole time.
rising expenses and cut Kelly added that the Fed
Stocks traded higher early its annual profit forecast and the government need
and airlines skidded after to be careful to focus on
in the day and jumped af- Southwest said its revenue smooth growth, as the re-
is suffering as it cuts fares to cent tax cuts will dump
ter the Fed announced its compete with other com- some short-lived stimulus
panies. into the economy.
decision. The Dow Jones The S&P 500 index slid 5.01 "The overall effect of the
points, or 0.2 percent, to tax cut is to deliver anoth-
industrial average climbed 2,711.93. The Dow Jones in- er keg to a keg party at 2
dustrial average lost 44.96 a.m.," he said. "The party is
250 points, but gave it all points, or 0.2 percent, to probably going to go a lit-
24,682.31. The Nasdaq tle longer but the hangover
up as new Fed Chairman composite fell 19.02 points, is going to be worse."
or 0.3 percent, to 7,345.29. Nine of the ten biggest
Jerome Powell addressed The Russell 2000 index of gainers on the S&P 500
smaller companies gained were energy companies.
reporters. At the end of 8.90 points, or 0.6 percent, Some of the biggest gains
to 1,579.30. went to Marathon Oil and
trading it wobbled and Bond prices edged lower. Anadarko Petroleum.
The yield on the 10-year Facebook stock is down
ended lower. The dollar Treasury note declined to 12.5 percent from the all-
2.88 percent from 2.90 per- time high it set Feb. 1.q
weakened and bond yields
turned lower. Yields had ris-
en earlier in the afternoon.
The Fed said the U.S. econ-
omy and the job market
continued to improve over
the last two months. It still
expects to raise interest
rates three times this year,
and said it might raise rates
three more times this year
instead of two.
Brent Schutte, the chief
investment strategist for
Northwestern Mutual
Wealth Management, said
Powell is trying to tell Wall
Street what the Fed's plans
are without worrying in-
vestors too much. He said
stocks dropped after Pow-
ell said rates might rise high-
er than the Fed expects.
