After Fed minutes, Wall Street posts 5th straight win

The S&P 500 rose to an all-time high while the Dow Jones Industrial Average and Nasdaq both added 0.4 per cent.
The S&P 500 rose to an all-time high while the Dow Jones Industrial Average and Nasdaq both added 0.4 per cent.PHOTO: AFP

NEW YORK (AFP) - Wall Street finished higher on Wednesday (May 24) for the fifth consecutive session, with investors reacting favorably to the US central bank's latest signals that it could raise interest rates as soon as next month.

The broad-based S&P 500 rose to an all-time high, with all three major indices moving up markedly after the release of Federal Reserve meeting minutes, following subdued trading during most of the day.

The blue-chip Dow Jones Industrial Average and tech-heavy Nasdaq both added 0.4 per cent, rising to 21,012.42 and 6,163.02 respectively. The broader S&P 500 gained 0.3 per cent, reaching 2,404.39.

Minutes released on Wednesday from a May 2-3 meeting showed members of the Federal Open Market Committee, which sets the benchmark US lending rate, believed the time would "soon" be right to raise rates.

There was also broad agreement on the approach to unwinding the Fed's massive balance sheet, which economists say could bs tantamount to a rate increase.

The FOMC is due to meet June 13-14 and futures markets forecast an 83 per cent likelihood that the central bank will increase its benchmark lending rate at that meeting.

"The big news obviously today was the release of the Fed minutes and the market basically liked what the Fed and its head Janet Yellen said," said Bill Lynch of Hinsdale Associates.

"But the big thing was also the Fed is going to trim their balance sheet and they laid out a plan on how to do so," he said, adding that investors generally appeared to approve.

 

Among the Dow's major gainers, investment bank Goldman Sachs added 2 per cent, DuPont gained 1.4 per cent and fast-food behemoth McDonald's rose 1.1 per cent after holding the company's annual shareholder meeting.

Shares in the grain trader Bunge Ltd gained 1 per cent on news that the Anglo-Swiss mining giant Glencore had expressed interest in a takeover.

Oil stocks were down following reports the Trump administration could slash US strategic reserves, with ExxonMobil falling 0.4 per cent, Royal Dutch Shell losing 0.2 per cent and Chevron down less than 0.1 per cent.