By Dan Strumpf And Saumya Vaishampayan
U.S. stocks fell Thursday, pulling back one session after the
Federal Reserve's latest update on monetary policy spurred strong
gains.
The Dow Jones Industrial Average fell 83 points, or 0.5%, to
17993, while the S&P 500 index fell seven points, or 0.3%, to
2092. The Nasdaq Composite Index gained six points, or 0.1%, to
4989.
Shares of energy companies posted among the market's sharpest
losses as oil prices retreated, with the S&P 500 Energy Index
shedding 1.4%. Shares of Apple Inc. gained 0.3% on its first day
trading as a Dow component.
In its statement on monetary policy Wednesday, the Fed dropped
its promise to remain "patient" before lifting interest rates, a
widely expected shift that opened the door to rate increases this
year.
But downbeat economic forecasts and comments by Fed Chairwoman
Janet Yellen indicated the central bank remains in no hurry to
raise rates. That stance caught many investors off guard, causing
sharp reversals in trades that had become popular in the days
leading up to the Fed statement, said Art Hogan, chief market
strategist at Wunderlich Securities.
Thursday's early trade saw an "unwind of that overreaction," he
said, prompting stocks to fall and the U.S. dollar to resume its
climb.
On Wednesday, the Dow Jones Industrial Average rose 1.3% and the
S&P 500 advanced 1.2%.
While stock-market action has been choppy in recent sessions,
stocks are hovering near all-time highs. The Dow is nearly 2% below
its record of 18288.63 reached early March. The Russell 2000 Index,
the benchmark for shares of small companies, fell 0.1% after rising
to a fresh record on Wednesday.
The Fed's first rate increase is likely to spark volatility
across assets. Still, it will be prompted by evidence of an
improving economy, which tends to boost corporate profit, said Mr.
Hogan. "By the time the Fed starts to lift off it's going to see
significant improvement in the economy, and that's good for
stocks," he said.
In economic news, jobless claims rose by 1,000 to 291,000 in the
week ended March 14, the Labor Department said Thursday. Economists
polled by The Wall Street Journal had expected 292,000 new
claims.
European stocks fell. Germany's DAX slipped 0.4% while France's
CAC 40 eased 0.3%.
In commodity markets, gold futures gained 0.8% to $1161.00 an
ounce. Crude-oil futures declined fell 3.9% to $42.92 a barrel.
Treasury prices fell, pushing the 10-year yield up to 1.924%,
compared with 1.945% on Wednesday.
Shares of AT&T, supplanted by Apple in the Dow, fell 1%.
Home builder Lennar reported stronger-than-expected results in
the first quarter as a continuing recovery in the housing market
led to a rise in deliveries and prices. Shares rose 1.3%.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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