Investing.com – Wall Street notched a seventh-straight record closed as bank stocks surged in the wake of a somewhat hawkish Federal Reserve statement that stoked December rate-hike expectations.
The Dow Jones Industrial Average closed higher at 22412.59. The S&P 500 closed 0.06% higher while the Nasdaq Composite closed at down 0.08%.
The policymaking Federal Open Market Committee (FOMC) agreed to keep its benchmark rate target at 1%-1.25%, forecasting at least one more hike this year.
The "dot plot," part of the FOMC's Summary of Economic Projections, indicated that the central bank saw rates rising to between 1.25% and 1.5% by the end of the 2017, pointing one further rate hike this year.
The unchanged rate-hike outlook was somewhat unexpected as investor expectations of a December rate hike in the run up to the Fed’s statement were slim amid expectations the sluggish pace of inflation would force the Fed to abandon its plan to hike rates at least once more this year.
Shares of banks rose sharply offsetting a slump in technology weighed by Apple Inc (NASDAQ:AAPL) after the tech gain’s smartwatch – Apple Watch 3 – drew a muted a reaction from consumers owing to a connectivity glitch.
JPMorgan Chase & Co (NYSE:JPM), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) ended the session more than 1% higher.
Higher interest rates are seen as boon for banks, boosting net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
On the economic data front, investors had to contend with sluggish U.S. housing sector activity in August pointing to possible weakness in third quarter economic growth.
Existing home sales declined 1.7% in August from the previous month to an annualised pace of 5.35m homes, the National Association of Realtors, said on Wednesday. Economists were expecting a 0.3% rise to 5.46m homes.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: McDonald’s Corporation (NYSE:MCD) up 1.6%, Pfizer Inc (NYSE:PFE) up 1.5% and Boeing Co (NYSE:BA) up 1.2%
Apple Inc (NASDAQ:AAPL) down 1.7%, Johnson & Johnson (NYSE:JNJ) down 1.5% and 3M Company (NYSE:MMM) down 1.4%, were among the worst Dow performers of the session.