US stocks retreat as Fed hikes interest rates

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, US, on Dec 14, 2016.
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, US, on Dec 14, 2016. PHOTO: BLOOMBERG

NEW YORK (AFP) – Wall Street stocks fell modestly and the dollar advanced after the Federal Reserve Wednesday (Dec 14) lifted its benchmark interest rate for only the second time in a decade. 

The policy-setting Federal Open Market Committee voted unanimously to increase the key federal funds rate to a range of 0.5 to 0.75 percent, but repeated that it expects the world’s biggest economy will require only “gradual” increases going forward. 

The Fed projected that it now expects three interest rate increases in 2017, up from the September plan of just two increases. 

 

Near 1940 GMT (3.40am Singapore time), the Dow Jones Industrial Average was at 19,874.92, down 0.2 percent and retreating from its proximity to the 20,000 landmark. 

The broad-based S&P 500 shed 0.3 percent to 2,265.11, while the tech-rich Nasdaq Composite Index lost 0.1 percent at 5,456.70.  The euro fell to US$1.0589, compared with US$1.0646 shortly before the announcement. The dollar also rose against the pound and the yen.