Real-time USA - 01:08 2022-12-05 pm EST
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US Stocks Decline as FOMC Raises Rates by 75 Basis Points

09/21/2022 | 04:55pm
(MT Newswires) -- US stocks slumped into the close on Wednesday as the Federal Reserve raised the federal funds rate by 75 basis points.

All three major market indexes shifted between gains and losses late in the day despite logging solid gains earlier in the session after the Federal Open Market Committee meeting, with the Dow Jones Industrial Average falling 1.7% to 30,183.78, the Nasdaq Composite slipping 1.8% to 11,220.19 and the S&P 500 tumbling 1.7% at 3,789.93.

Consumer discretionary and communication services were the steepest decliners, with all sectors in the red.

The 2-year yield jumped 9.1 basis points to 4.06%, the highest level since 2007, while the 10-year rate was down by 4.3 basis points at 3.53%.

The US dollar index advanced 1% to 111.30 while the West Texas Intermediate futures dropped 1% to $83.13 a barrel.

The Federal Reserve's monetary policy-setting committee on Wednesday sharply raised its year-end benchmark lending rate outlook while forecasting a steep decline in economic growth as it delivered its third straight 75-basis-point rate hike to a range of 3% to 3.25% to fight soaring inflation.

The year-end fed funds rate estimate was revised up sharply to 4.4% from 3.4% previously, the FOMC's statement Wednesday afternoon showed. The updated estimates for the funds rate also show another 25-basis-point of tightening in 2024 to 4.6% before easing to 3.9% in 2024 and 2.9% in 2025.

There were no material changes to the statement, as the FOMC "anticipates that ongoing increases in the target range will be appropriate," but that it will remain monitor incoming data and act accordingly.

In other economic news, the pace of US existing home sales fell by 0.4% to a 4.8 million seasonally adjusted annual rate in August from 4.82 million in July, compared with 4.7 million anticipated in a survey compiled by Bloomberg, data from the National Association of Realtors released Wednesday showed.

In company news, General Mills (GIS) reported higher fiscal first-quarter adjusted earnings and net sales in addition to lifting its fiscal 2023 guidance. Shares jumped 5.8%, the most on the S&P 500.

Walmart (WMT) disclosed a cautious hiring plan for the upcoming holiday season as the company tackles excess inventory and the demand for products cools down amid higher prices and tighter household budgets. Shares climbed nearly 1%, the top gainer on the DJIA.

Gold was up 0.7% to $1,682.20 per troy ounce, and silver was up 2.4% to $19.64 per ounce.

MT Newswires 2022
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