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US-STOCKS-MARKETS
US stocks end lower on trade tensions, Fed rate hike
NEW YORK, June 14, 2018 (BSS/AFP) – Wall Street stocks finished lower on
Wednesday after the Federal Reserve lifted interest rates and signaled a more
aggressive pace of additional hikes amid a strengthening economy.
Stocks were also pressured by revived trade war fears on a report that
President Donald Trump’s administration would proceed with tariffs on Chinese
goods.
The Dow Jones Industrial Average dropped 0.5 percent to 25,201.20.
The broad-based S&P 500 shed 0.4 percent to 2,775.63, while the tech-rich
Nasdaq Composite Index dipped 0.1 percent to 7,695.70, retreating from
Tuesday’s record.
In addition to lifting benchmark interest rates to a range of 1.75-2.0
percent, which was expected, the Fed released interest rate projections that
implied two more rate hikes instead of one in 2018 and four rate hikes in
2019 instead of three.
The FOMC statement stressed that rising interest rates were unlikely to
derail economic growth — which the committee now characterized as “strong”
rather than “moderate,” an upbeat appraisal maintained by Fed Chair Jerome
Powell during a news conference.
At roughly the same time as the Fed announcement, the Wall Street Journal
reported that the Trump administration intends to proceed with a plan to
impose tariffs on tens of billions of dollars of Chinese goods, a move
expected to prompt retaliatory measures from China.
Boeing and Caterpillar, two blue-chip companies with significant
operations in China, both lost around two percent.
Art Hogan, chief market strategist at Wunderlich Securities, described the
Fed’s decision as “moderately hawkish,” but said it was not much different
than expected. He said Boeing’s drop reflected trade-war fears.
“Right now, the stock market is as much about trade policy as it is about
monetary policy,” Hogan said.
Media stocks were among the biggest movers following a US judicial
decision that cleared the way for the $85 billion merger of wireless and
broadband giant AT&T with media-entertainment conglomerate Time Warner.
Time Warner rose 1.8 percent, while AT&T dropped 6.2 percent.
The court’s rejection of the Justice Department’s antitrust challenge to
the AT&T deal was seen as easing the pathway for additional media
consolidation.
Twenty-First Century Fox, which has a deal to sell key assets to Disney,
surged 7.7 percent, suggesting the market anticipates a bidding war over the
assets. Disney gained 1.9 percent.
Comcast, which shed 0.2 percent during the session, announced after the
closing bell that it was offering $65 billion for the Fox assets, topping
Disney’s bid.
BSS/AF/HR/1130