WASHINGTON (REUTERS) - Wall Street was lower on Thursday, a day after the Federal Reserve's lowered projection of two interest rate hikes in 2016 pushed the S&P 500 to its highest close this year.
The Fed, which left rates unchanged, pointed to moderate U.S. economic growth and strong job gains but cautioned about risks from an uncertain global economy. The central bank had laid out four hikes in 2016 when it raised rates in December.
While markets across assets cheered the move, the central bank's dovish tone raised some concern about the prospects of the weakness in the global economy impacting the U.S. economy. "There's this little bit of rethinking and so, we're looking at a softer opening as some questions arise to the prospects of future growth impacting earnings," said Peter Cardillo, chief market economist at First Standard Financial in New York.
Mr Cardillo said rising commodity prices and the expiration of futures options contracts on Friday should provide some support to the market.
Brent gained above US$40 a barrel as the market continues to be hopeful of a plan by major oil producers to tackle a global glut.
Data on Thursday showed U.S. unemployment claims rose less than expected to 265,000 last week, pointing to a strengthening labor market.
At 9:43 a.m. ET (9:43 p.m Singapore time), the Dow Jones industrial average was down 24.45 points, or 0.14 per cent, at 17,301.31, the S&P 500 was down 4.34 points, or 0.21 per cent, at 2,022.88 and the Nasdaq Composite was down 19.41 points, or 0.41 per cent, at 4,744.56.
Five of the 10 major sectors were higher. Gains in energy and materials, were offset by losses in financials and healthcare.