Stocks little changed after S&P 500 record on Fed comments

LONDON – U.S. stocks were little changed after the Standard & Poor’s 500 closed at a record Wednesday as the Federal Reserve promised to keep interest rates low amid signs of an economic recovery.

The Standard & Poor’s 500 Index added less than 0.1 percent to 1,957.39 at 9:31 a.m. in New York. The benchmark equity index advanced for four straight days through Wednesday.

“We think this is a seriously dovish statement from the Federal Reserve and that the Fed is willing to accept inflation well above 2 percent before any action will be taken,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion in assets, said by phone. “The overall broader markets are sniffing that out.”

Global equities rallied Wednesday after Fed Chair Janet Yellen said accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. Yellen emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

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The central bank reduced its bond purchases by $10 billion for a fifth consecutive meeting, to $35 billion, leaving it on schedule to end the program this year. The stimulus has helped the S&P 500 rally 189 percent from its bear-market low in March 2009.

“Yellen is a super dove,” Lex Van Dam, a fund manager at Hampstead Capital LLP in London, said in an interview. “There remain very few alternatives for your cash other than putting it in stocks. The trend remains up in markets. I believe in the Fed. The economy has recovered on financial engineering.”

The benchmark index has climbed 7.8 percent since a low on April 11 as data showed the economy is recovering from the impact of extreme weather earlier this year. The gauge is trading at 16.6 times the projected earnings of its members, up from 15.5 times at the beginning of the year.

Fewer Americans filed applications for unemployment benefits last week, a sign of steady progress in the labor market. Jobless claims fell 6,000 to 312,000 in the week ended June 14, the Labor Department reported Thursday in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 313,000.

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