Stocks Move Mostly Higher In Reaction To Fed Statement - U.S. Commentary

(RTTNews) - After some initial volatility, stocks have moved mostly higher in reaction to the Federal Reserve's monetary policy announcement. The major averages have climbed firmly into positive territory.

Currently, the Dow is up 60.13 points or 0.4 percent at 15,570.72, the Nasdaq is up 29.72 points or 0.8 percent at 3,646.19 and the S&P 500 is up 10.86 points or 0.6 percent at 1,696.82.

The upward move came on the heels of the release of the Fed's post-meeting policy statement, which revealed that the central bank is leaving interest rates and its asset purchase program unchanged.

The Fed did not specifically mention the outlook for its asset purchase program, which many economists expect to be scaled back at the next meeting in September.

In its assessment of the economy, the central bank said activity expanded at a "modest pace" during the first half of the year, which was seen as downgrade from the June meeting, when the Fed said activity had been expanding at a "moderate pace."

The Fed also noted that inflation persistently below its 2 percent objective could pose risks to economic performance, although it noted that inflation is expected to move higher over the medium term.

Chris Low, chief economist at FTN Financial, said, "The Fed's description of the economic environment changed in a way suggesting they are a little less impressed with the recent performance of the economy."

"Nevertheless, the Fed remains confident the economy will soon reaccelerate, suggesting their plans to reduce the size of asset purchases will go forward on whatever schedule they are currently contemplating," he added. "We expect the first reduction in purchases in September."

Earlier in the day, some positive sentiment was generated by the release of a pair of better than expected reports on private sector employment and second quarter GDP.

Housing stocks have shown a substantial move to the upside on the heels of the Fed announcement, with the Philadelphia Housing Sector Index surging up by 2.2 percent.

Gold, banking, oil, and trucking stocks are also posting notable gains in late-day trading, moving higher along with most of the major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong's Hang Seng Index ended the day down by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, the French CAC 40 Index and the German DAX Index edged up by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries have climbed back near the unchanged line on the heels of the Fed statement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.601 percent.