The US markets ended sharply higher on Wednesday as the minutes of the latest Federal Reserve meeting offered few surprises, although the central bank indicated it intends to move expeditiously to a more neutral monetary policy stance. The minutes revealed the Fed plans to use both interest rate increases and reductions in the size of its balance sheet to achieve a neutral posture. At the meeting, the Fed decided to raise the target range for the federal funds rate by 50 basis points to 0.75 to 1.0 percent, marking the biggest rate hike since May 2000. The central bank also decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1. The minutes of the meeting showed most participants agreed additional 50 basis point increases would likely be appropriate at the next couple of meetings.
On the sectoral front, Housing stocks turned in some of the market's best performances on the day, with the Philadelphia Housing Sector Index surging by 3.1 percent. Retail stocks also turned in a strong performance on the day, driving the Dow Jones US Retail Index up by 2.3 percent. The rebound came after index ended Tuesday's trading at a two-year closing low. On the economic data front, the Commerce Department said durable goods orders rose by 0.4 percent in April after climbing by a downwardly revised 0.6 percent in March. Street had expected durable goods orders to advance by 0.6 percent compared to the 1.1 percent jump that had been reported for the previous month. Excluding orders for transportation equipment, durable goods orders edged up by 0.3 percent in April after surging by 1.1 percent in March. Ex-transportation orders were also expected to increase by 0.6 percent.
Dow Jones Industrial Average rose 191.66 points or 0.6 percent to 32,120.28, Nasdaq rose 170.29 points or 1.51 percent to 11,434.74 and S&P 500 was up by 37.25 points or 0.95 percent to 3,978.73.
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