U.S. Stocks Rally as Fed Statement Spurs Bets on Rate Timing

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U.S. stocks climbed, erasing an earlier loss, after the Federal Reserve said data suggest economic growth has moderated, fueling speculation it won’t be in a rush to raise interest rates.

The Standard & Poor’s 500 Index rallied 1.2 percent to 2,099.26 at 4 p.m. in New York. The Russell 2000 Index advanced 0.8 percent to a record. The Nasdaq Composite added 0.9 percent, and briefly climbed back above 5,000.

The central bank said higher interest rates in April are unlikely and it won’t tighten until it is “reasonably confident” inflation will return to its target and the labor market improves further. The Fed also dropped an assurance it will be “patient” in raising interest rates.

Officials lowered their median estimate for the federal funds rate at the end of 2015 to 0.625 percent, compared with 1.125 percent in December forecasts. The median estimate for the end of 2016 declined to 1.875 percent from 2.5 percent, according to the Federal Open Market Committee’s quarterly Summary of Economic Projections.

Source : Bloomberg

European Stocks Rise as U.K. Shares Climb After Osborne Budget

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European stocks climbed as U.K. shares rallied after a budget presentation and Swedish equities jumped after a rate cut.

The Stoxx Europe 600 Index added 0.3 percent to 398.65 at the close of trading, erasing earlier losses of as much as 0.4 percent. Investors are also awaiting a Federal Reserve policy decision for cues on the timing of a rate increase.

The U.K.’s FTSE 100 Index climbed 1.6 percent as Chancellor of the Exchequer George Osborne raised forecasts on Britain economic growth for 2015 and 2016. The OMX Stockholm 30 Index jumped 1.7 percent to a record as Sweden’s central bank cut its key interest rate and expanded a quantitative-easing program.

Carmakers posted the worst drop among 19 industry groups, with Bayerische Motoren Werke AG falling 4.2 percent after forecasting slower earnings growth in 2015. The gauge of auto companies fell for a second day, after rising to a record on Monday.

Source : Bloomberg

U.S. Stocks Decline for Second Session Amid Fed Rate Speculation

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U.S. stocks fell for a second day as investors speculated the Federal Reserve will signal a change in its stance on the timing for higher interest rates.

The Standard & Poor’s 500 Index slipped 0.4 percent to 2,065.93 at 12:27 p.m. in New York. The gauge hasn’t posted a two-day gain in a month. The Dow Jones Industrial Average lost 111.29  points, or 0.6 percent, to 17,737.79. The Nasdaq Composite Index fell 0.3 percent.

The Fed will release its policy statement at 2 p.m. in Washington, and Chair Janet Yellen speaks to the press at 2:30 p.m. Yellen said in December the “patient” phrase made a move unlikely in the next two meetings. Dropping it would set the stage for a rate increase as early as June.

Speculation that a strengthening labor market is pushing the central bank closer to a rate increase has weighed on U.S. equities, making them among the worst-performing developed markets this year. Fed stimulus has helped spur a six-year bull market that made the S&P 500 more than triple since a low in in 2009.

Source : Bloomberg

Aust dollar weakens on Fed fears

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The Australian dollar is weaker as the US Federal Reserve begins its two-day meeting on monetary policy.

At 7am (AEDT), the local currency was trading at US76.18c, down from US76.29c on Tuesday.

The US dollar rose against a range of currencies overnight as the Fed's Federal Open Market Committee began its key meeting on interest rates.

Traders are waiting for Thursday morning's communique to see if Fed policymakers drop the word "patience" in regards to a possible rate rise.

Weaker commodity prices, in light of a firmer greenback, is also weighing on the Australian dollar.

The local unit weakened on Tuesday after the minutes of the Reserve Bank of Australia's March meeting convinced traders a near-term rate cut was more likely.

Source : MarketsSpectator