Stock Market Reacts to Federal Reserve Rate Hike

Strategic Insights -

The stock market closed mixed on the day after the Federal Reserve Board raised interest rates, with big stocks largely unchanged while smaller over-the-counter stocks continued their rally for the eighth session. The bond market kept most of its price advance but closed slightly lower. The Dow Jones industrial average fell 8.09 points to 3,776.48, while the broader Standard & Poor's 500 index rose 0.16 point to 465.17. The Nasdaq composite index rose 7.15 points to 742.66.

Key Takeaways:

  • The Nasdaq composite index rose 7.15 points to 742.66, nearly tripling the gain of 2.62 points on Tuesday.
  • Of the top 10 gainers in Nasdaq stocks, eight were technology or biotechnology stocks, with Intel rising 23/16 to 63 3/4 and Microsoft rising 1 to 55 7/8.
  • The bond market fell after the price of the 30-year Treasury bond rose more than one and a half points to 10118/32, with its yield rising to 7.39 percent from 7.37 percent.
  • The dollar fell despite the Fed's interest-rate move, which pays foreigners and other investors more money to hold dollar-denominated assets.
  • Commodity prices were largely unchanged, with the Commodity Research Bureau index rising 0.36 point to 229.53.
  • The New York Stock Exchange composite index rose 0.15 point to 256.40, with advancing stocks outnumbering declining stocks 1,190 to 963.
  • Volume on the New York Stock Exchange was above normal, with 312.8 million shares changing hands.

Statistics:

  • Dow Jones industrial average: 3,776.48 (-8.09 points)
  • Standard & Poor's 500 index: 465.17 (+0.16 point)
  • Nasdaq composite index: 742.66 (+7.15 points)
  • Bond market price: 10118/32 (price rose more than one and a half points)
  • Yield of 30-year Treasury bond: 7.39 percent (rose from 7.37 percent)
  • Commodity Research Bureau index: 229.53 (+0.36 point)
  • New York Stock Exchange composite index: 256.40 (+0.15 point)
  • Trading volume on NYSE: 312.8 million shares

Sources:

  • "Federal Reserve Board raises interest rates; stock market reacts" (The New York Times)
  • "The Favorite Stocks" table (The New York Times)
  • "Dow industrials, S.& P. 500, and other indexes" (The New York Times)