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US stocks extend gains on Fed statement

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New York:US stocks extended a recent rally as the Federal Reserve’s decision to keep the interest rates unchanged continued to drive the stock market.

The Dow Jones Industrial Average rose 120.81 points, or 0.69 percent, to 17,602.30 on Friday, Xinhua news agency reported.

The S&P 500 gained 8.97 points, or 0.44 percent, to 2,049.56. The Nasdaq Composite Index added 20.66 points, or 0.43 percent, to 4,795.65.

The Fed kept its benchmark short-term interest rates unchanged earlier this week as widely expected, noting that “global economic and financial developments continue to pose risks” to the US economy.

The Fed’s updated projections showed that policymakers expected the federal funds rate to rise to around 0.9 percent at the end of 2016, implying two quarter-percentage-point rate increases this year, down from four estimated in December.

“The Fed has strayed furthest from the expectations in the market late last year. The result is a 4.7 percent drop in the major-currency trade-weighted dollar index since its January 19 high,” said Chris Low, chief economist at FTN Financial.

A weaker dollar will hurt US trade partners in the short run, but lower global interest rates, in part thanks to the Fed’s failure to hike, is expected to benefit the global economy, he said.

Overseas, Chinese shares gained across-the-board on Friday as the real estate industry warmed and yuan strengthened. The benchmark Shanghai Composite Index gained 1.73 percent to 2,955.15 points.

European equities closed mostly higher Friday amid oil volatility. German benchmark DAX index at Frankfurt Stock Exchange rose 0.59 percent, while French benchmark index CAC 40 added 0.44 percent.

Gold futures on the COMEX division of the New York Mercantile Exchange fell as the US dollar showed strength.

The most active gold contract for April delivery fell $10.7, or 0.85 percent, to settle at $1,254.30 per ounce.

IANS

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