By Kate Gibson
U.S. stocks climbed Tuesday after the Federal Reserve kept its
key interest rate at record lows and repeated its "extended period"
policy pledge.
"Today is a non-event but expect a change in April," said Peter
Boockvar, equity strategist at Miller Tabak.
While the Fed was widely expected to keep its target rate for
overnight loans at between zero and 0.25%, analysts combed the
central bank's accompanying policy statement for clues as to the
timing of future rate-hike moves.
Any differences in the Fed's wording that signaled the central
bank would hike rates sooner rather than later could have sparked
selling of equities, given that higher rates translate to increased
borrowing costs and typically hinder economic growth.
There was one dissent to the policy stance, with Thomas Hoenig,
president of the Kansas City Federal Reserve Bank, objecting to the
'extended period' phrasing for a second consecutive meeting. .
"Hoenig was the only dissenter at the meeting; however, we
believe that with the information in hand as of right now, the Fed
is likely to alter its language somewhat at the upcoming Fed
meeting. This position is, of course, open to change," said Dan
Greenhaus, chief economic strategist at Miller Tabak.
Up for a sixth day, the Dow Jones Industrial Average (DJI) was
up 25.70 points, or 0.2%, at 10,667.85, with two-thirds of its 30
components advancing, led by General Electric Co. (GE). Its shares
gained 3.5% after the company's CFO said he expects the
conglomerate's earnings and dividend to climb next year.
Also boosting the Dow, Intel Corp. (INTC) rose 3.4% after the
technology bellwether released its newest server chips.
On the New York Stock Exchange, advancers led decliners nearly
2-to-1.
A day after finishing at a 17-month high, the S&P 500 Index
(SPX) added 5.69 points, or 0.5%, to 1,156.2, with natural-resource
companies leading the gains and health care the sole declining
sector among the index's 10 industry groups.
The Nasdaq Composite Index (RIXF) climbed 9.28 points, or 0.4%,
to 2,371.56.
The dollar weakened against the euro after S&P opted not to
downgrade Greece, a step the rating agency last month warned was
under consideration.
"Greece is no longer facing the threat of an imminent
downgrade," said analysts at Action Economics.
Ahead of Tuesday's open, the Commerce Department reported
new-home construction fell 5.9% to a seasonally adjusted annual
rate of 575,000. The January count was revised up to a pace of
622,000 units.
In a separate report, the Labor Department said the price of
imports declined 0.3% in February, the first drop in seven
months.
A standout among retailers was Limited Brands Inc. (LTD), shares
of which rose 3.9%. The company declared a special dividend of $1 a
share and said it would repurchase up to $200 million in stock.
The dollar's slide against the euro and other major currencies
boosted commodities including gold and oil, making them less costly
to foreign buyers. and
Shares of natural-resource companies also rose, with Cliffs
Natural Resources Inc. (CLF) up 5% and Newmont Mining Corp. (NEM)
gaining 2.8%.