Published: Thu, March 22, 2018
Finance | By Cynthia Curry

Stocks end modestly lower after Fed hikes rates; energy up

Stocks end modestly lower after Fed hikes rates; energy up

The Nasdaq gained 20.06 (+0.27 percent) to close at 7,364.30, while the S&P 500 finished trading at 2,716.94, up 4.02 (+0.15 percent) for the day.

Those expectations had sent the dollar to nearly three-week highs on Tuesday, but it eased back a quarter percent against a basket of currencies on Wednesday, having lost almost half a percent this month.

Facebook shares tumbled 7.1%, its worst drop in almost four years, after both USA and European lawmakers called upon its chief executive Mark Zuckerberg to explain how Cambridge Analytica, a consultancy that worked on President Donald Trump's election campaign, gained access to data on 50 million Facebook users.

Few economists expect new Fed chair Jerome Powell to alter the trajectory of the bank's anticipated rate path, but as it is his first meeting at the helm, investors have been somewhat on edge as the meeting approaches.

Stocks have struggled this year while bond yield have moved higher. The blue chip index Dow Jones rose by 116.36 points to 24,727.27 points.

So far, the Fed has signalled three hikes this year.

"So far, we have seen low-level (trade) skirmishes, which are not material enough to affect the world economy", said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

Facebook shares have lost about 9 percent in just two days, and hurt shares of other social media companies such as Twitter and Snap Inc as the issue raised broader questions about consumer privacy and whether tougher regulation is on the horizon.

Actress and activist Cynthia Nixon launches run against Cuomo
Ms Nixon is aligned with New York City Mayor Bill de Blasio, a Democrat who is politically to the left of Mr Cuomo. Nixon's wife, Christine Marinoni , recently stepped down from her position in the de Blasio administration.

The world's financial leaders were seeking to clearly endorse free trade and renounce protectionism amid concern that US tariffs on steel and aluminum and looming actions against China could trigger a trade war that would hurt global growth.

MSCI (Frankfurt: 3HM.F - news) 's all-country equity market index flatlined, and is now 6 percent off January's record highs, pressured by the trade war fears and the possibility that the Fed will tighten policy more than expected.

Fears of a trade war have also weighed on commodity prices, though tensions in the Middle East supported oil prices on Wednesday.

Brent crude futures rose $2.05, or 3 percent, to settle at $69.47, almost a 7-week high.

USA crude rose 1.34 percent to $64.39 per barrel and Brent was at $68.47, up 1.56 percent on the day.

The fall in the USA dollar after the Fed statement also helped to push gold prices up from a three week low.

Amazon, Apple, Netflix and Alphabet - members of the so-called FAANG group of stocks, along with Facebook - were down between 1.7 percent and 7.2 percent.

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