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United States. Federal Reserve Board

Stocks End Mixed as Fed Keeps to Gradual Interest Rate Hikes

Strategic Insights

— 1 min read

Stocks in the United States experienced a mixed finish yesterday as the Federal Reserve announced a quarter-percentage-point increase in the nation's benchmark lending rate. The Fed's decision to maintain a "measured" approach to further rate hikes helped ease investor worries, but the market still received mixed signals from the economy. American factories showed a slight increase in orders last month, but the majority of these orders were for consumable goods, indicating a slowdown in consumer spending.

Key Takeaways:

  • The Federal Reserve kept interest rates at 3 percent and announced a "measured" approach to future rate hikes.
  • The Dow Jones industrial average rose 5.25 points, or 0.1 percent, to 10,256.95, while the Standard & Poor's 500-stock index fell 0.99 points, or 0.1 percent, to 1,161.17.
  • The Nasdaq composite index gained 4.42 points, or 0.2 percent, to 1,933.07.
  • Falling crude oil prices helped support stocks, with a barrel of light crude settling at $49.50, down $1.42.
  • Orders for big-ticket items fell sharply, indicating a slowdown in consumer spending.
  • Tyco International's shares dropped $2.07, to $28.65, after it reported a 75 percent decline in second-quarter profit.
  • Boeing and Lockheed Martin's shares rose after announcing a joint venture to produce rockets for the US military.
  • Oshkosh Truck's shares tumbled $4.73, to $72.02, despite reporting earnings that exceeded expectations.

Statistics:

  • The Dow Jones industrial average rose 5.25 points, or 0.1 percent, to 10,256.95.
  • The Standard & Poor's 500-stock index fell 0.99 points, or 0.1 percent, to 1,161.17.
  • The Nasdaq composite index gained 4.42 points, or 0.2 percent, to 1,933.07.
  • A barrel of light crude oil settled at $49.50, down $1.42.
  • American factories showed a 0.1 percent increase in orders last month.
  • Tyco International's second-quarter profit declined 75 percent.
  • Boeing's share price rose 49 cents, to $59.87.
  • Lockheed Martin's share price added 55 cents, to $62.41.

Sources:

  • The Wall Street Journal, June 2, 2003
  • Bloomberg Financial Markets
  • Associated Press
  • The New York Times, June 2, 2003

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