Welcome AccessNorthGa.com
 LATEST NEWS
 Top Stories
 U.S.
  Severe Weather
  Bird Flu
 World
  Castro
  Mideast Crisis
  Iraq
 Business
 Personal Finance
 Technology
 Sports
  Sports Columns
  NASCAR
  Baseball
  College Hoops
  NBA
  NHL
  Tennis
  Golf
 Entertainment
 Health
 Science
 Politics
 Washington
 Offbeat
 Podcasts
 Blogs
 Weather
 Raw News
 NEWS SEARCH
 
 Archive Search
 SPECIAL SECTIONS
 Multimedia Gallery
 AP Video Network
 Today
 in History
 Corrections
Dec 13, 5:02 PM EST

US stocks indexes close mostly higher after Fed rate hike


AP Photo
AP Photo/Mark Lennihan

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

The major U.S. stock indexes finished mostly higher Wednesday, with small companies notching big gains as lawmakers in the House and Senate reached a deal on a sweeping tax reform package.

The Dow Jones industrial average eked out its third record-high close in as many days, driven by a jump in Caterpillar. But a last-minute pullback in bank stocks left the Standard & Poor's 500 index slightly lower.

Packaged food and beverage stocks, health care companies and industrials shares accounted for much of the market's modest gains. Banks struggled as long-term bond yields edged lower, which makes it tougher for banks to earn money from lending.

The decline in financial stocks came even as the Federal Reserve raised its benchmark rate for the third time this year. The move, which was widely expected, came as the central bank noted that the U.S. economy was on sound footing.

"Widely expected. No big surprises. No big changes," said Tim Dreiling, regional investment director at U.S. Bank Wealth Management. "It's encouraging that they continue to see economic growth continuing into 2018, which aligns with our thinking."

The S&P 500 index slipped 1.26 points, or 0.1 percent, to 2,662.85. The index closed at all-time highs on Monday and Tuesday.

The Dow gained 80.63 points, or 0.3 percent, to 24,585.43. The Nasdaq added 13.48 points, or 0.2 percent, to 6,875.80. The Russell 2000 index of smaller-company stocks picked up 8.33 points, or 0.6 percent, to 1,524.45.

Bond prices rose. The yield on the 10-year Treasury fell to 2.34 percent from 2.40 percent late Tuesday.

Trading got off to a subdued start Wednesday as investors waited for the afternoon policy update from the Fed.

As expected, the central bank raised the federal funds rate - what banks charge each other for short-term loans - by 0.25 percentage points to a still-low range of 1.25 to 1.5 percent. The latest short-term rate increase is the third one implemented by the Fed this year and signals the central bank's confidence that the U.S. economy remains on solid footing 8Ĺ years after the end of the Great Recession.

The Fed also said it expects the job market and the economy to strengthen further next year, which is one reason it forecast that it would raise rates three times next year.

Developments out of Washington put investors in the mood to buy small company shares about two hours before the Fed's announcement.

Republican leadership in the House and Senate forged an agreement Wednesday on the GOP's planned overhaul of the nation's tax laws. The move paves the way for final votes next week to slash taxes for businesses and give many Americans modest tax cuts starting next year. Smaller companies stand to benefit most from a reduction in corporate tax rates because they tend to pay higher taxes than bigger corporations.

"If you look at the mix today, small caps are doing better than large caps," said Sameer Samana, global technical and equity strategist for Wells Fargo Investment Institute. "Clearly, they would be the better beneficiaries because they tend to pay higher tax rates."

Packaged food and beverage companies posted solid gains. Coca-Cola rose 61 cents, or 1.3 percent, to $45.90.

Health care stocks also rose. Incyte climbed $2.70, or 2.8 percent, to $98.10.

Caterpillar led the gainers among industrials stocks, adding $5.15, or 3.6 percent, to $148.57. The construction and mining equipment company was also the biggest gainer in the Dow.

Traders also bid up shares in Western Digital after the hard drive maker resolved a dispute with its partner Toshiba over Toshiba's plan to sell its flash memory business. Western Digital rose $1.86, or 2.3 percent, to $83.63.

Investors also welcomed some corporate deal news.

Finisar jumped 22.8 percent after Apple said it will invest $390 million in the fiber optic component supplier so it can make more lasers used in facial recognition technology. Finisar increased $4.40 to $23.70.

Target rose 2.7 percent after the retailer said it plans to boost its same-day delivery capability by paying $550 million for Shipt. The delivery service company charges members $99 a year and sends people out to choose and deliver groceries from stores. Target added $1.65 to $62.67.

Shares in Diebold fell 2.7 percent after the ATM and security systems maker said CEO Andreas Mattes resigned. The stock gave up 50 cents to $18.

Banks and other financial stocks declined the most among the 11 company sectors in the S&P 500. Charles Schwab slid $1.23, or 2.4 percent, to $50.33.

Oil prices veered lower, giving up early gains. Benchmark U.S. crude fell 54 cents to settle at $56.60 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, slid 90 cents, or 1.4 percent, to close at $62.44 per barrel in London.

The decline in oil prices weighed on several energy stocks. National Oilwell Varco lost 55 cents, or 1.7 percent, to $32.59.

The dollar fell to 112.52 Japanese yen from 113.58 yen late Tuesday. The euro strengthened to $1.1820 from $1.1737.

Bitcoin futures fell on their third day of trading, dropping $965, or 5.4 percent, to $17,055 on the Cboe Futures Exchange. The futures allow investors to make bets on the future price of bitcoin. The average price of an actual bitcoin was $16,654 in trading on private exchanges, according to Coindesk. The price of the digital currency has soared this year, having begun 2017 under $1,000.

In other energy futures trading, wholesale gasoline fell 5 cents, or 3 percent, to $1.65 a gallon. Heating oil shed 3 cents to $1.90 a gallon. Natural gas rose 4 cents, or 1.4 percent, to $2.72 per 1,000 cubic feet.

Gold rose $6.90 to $1,248.60 an ounce. Silver gained 20 cents to $15.87 an ounce. Copper added 3 cents to $3.05 a pound.

Major stock indexes in Europe also closed lower Wednesday. Germany's DAX fell 0.4 percent, while France's CAC-40 slid 0.5 percent. London's FTSE 100 shed 0.1 percent.

Earlier in Asia, Hong Kong's Hang Seng rose 1.5 percent, while Tokyo's Nikkei 225 shed 0.5 percent. Seoul's Kospi added 0.8 percent. Sydney's S&P-ASX 200 picked up 0.1 percent and India's Sensex added 0.4 percent.

© 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.