NEW YORK – U.S. stocks turned higher Wednesday after the Federal Reserve indicated it’s not in a hurry to raise interest rates too quickly. Retailers and technology companies led the way as the market erased some early losses.
Stocks opened lower after a business survey suggested that the eurozone economy might remain weak for longer than experts had expected.
Investors bought U.S. and European government bonds, which sent yields and interest rates lower and hurt banks. The S&P 500 index fell as much as 14 points early on.
The market turned higher after the Fed released minutes from its meeting in early May. Officials concluded that the Fed should be on track to keep raising interest rates gradually, and some said it wouldn’t be a problem if inflation briefly went past the Fed’s target rate of 2 percent. That suggests the Fed won’t raise interest rates too quickly, a development that worries investors because it would slow down economic growth.
“Investors are sort of nervous around an overly aggressive Fed at this point in the cycle maybe throwing us into a recession,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.
The S&P 500 index rose 8.85 points, or 0.3 percent, to 2,733.29. The Dow Jones industrial average gained 52.40 points, or 0.2 percent, to 24,886.81. The Nasdaq composite climbed 47.50 points, or 0.6 percent, to 7,425.96. The Russell 2000 index of smaller-company stocks added 2.37 points, or 0.1 percent, to 1,627.61.
Federal Reserve officials left interest rates unchanged in early May and investors expect they will raise them in mid-June. The central bank’s members discussed concerns such as rising wage pressures and possible negative reactions to the Trump administration’s trade policies, but didn’t change their overall views.
This article provided by NewsEdge.