Stocks, dollar up after Fed, boosted by strong data

Wed Feb 1, 2017 4:25pm EST
 
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By Dion Rabouin

NEW YORK (Reuters) - Stocks advanced around the globe and the dollar edged higher on Wednesday as strong data suggested the global economy was picking up steam and the Federal Reserve released an upbeat statement on the health of the U.S. economy.

The Fed left rates unchanged in its first meeting since President Donald Trump took office, but its relatively upbeat outlook suggested it was on track to tighten monetary policy this year.

The dollar reduced its gains after the Fed's decision but remained 0.2 percent .DXY higher, buoyed by strong readings on U.S. employment and manufacturing data.

U.S. factory activity hit a more than a two-year high in January and a private payrolls report shot past expectations.

“The market didn’t get any new insights from the statement as far as a trigger for a more hawkish Fed, and that is prompting some minor profit-taking on the dollar, but there is nothing in this Fed statement to change the bigger picture, from our perspective, that underlying U.S. growth remains robust and the Fed will hike 2-3 times over the next 12 months,” said Shahab Jalinoos, global head of FX strategy at Credit Suisse.

Wall Street stocks turned positive after the Fed's decision on interest rates, but gains were limited in S&P, which snapped a four-day fall.

The Nasdaq, which is more technology-heavy, was lifted by a 6.1-percent rise in Apple (AAPL.O: Quote) after the company's strong earnings and iPhone sales.

The Dow Jones Industrial Average .DJI rose 26.85 points, or 0.14 percent, to 19,890.94, the S&P 500 .SPX gained 0.68 points, or 0.03 percent, to 2,279.55 and the Nasdaq Composite .IXIC added 27.87 points, or 0.5 percent, to 5,642.65.   Continued...

 
Federal Reserve  Chair Janet Yellen arrives to hold a news conference following day two of the Federal Open Market Committee (FOMC) meeting in Washington, U.S. on December 14, 2016. REUTERS/Gary Cameron/File Photo