- College algebra to be removed from Southeast required curriculum (10/10/17)1
- State declares test results for schools invalid (10/4/17)2
- Cape Chinese restaurant purchases old Ponderosa property in Perryville (10/10/17)
- Child-custody advocate: State law needs fix to provide parents with more equal custody (10/12/17)
- One of Cape's oldest mom-and-pop restaurants opens in new location (10/10/17)
- Cancer will 'change your life, but it doesn't have to rule it' (10/8/17)
- Ships to stay docked in Cape a week longer (10/10/17)
- Past Rowdy the Redhawk mascot's identity revealed (10/15/17)
- Bills addressing equal child custody to be filed, legislators say (10/13/17)
- Scott City council passes measures to block treatment plant project (10/10/17)1
Stocks mixed as Fed leaves door open for stimulus
NEW YORK -- Stocks got a brief bump following word that the Federal Reserve is ready to do more to help the economy, but ended mostly lower Tuesday after the central bank disappointed some investors by not taking any bold new actions.
Treasury prices rallied as investors saw the Fed's announcement as a signal that more bond purchases were on the way.
The Fed said it is concerned that inflation is below levels consistent with a healthy economy and indicated that it is ready to provide "additional accommodation" to support the recovery. That would mean more purchases of Treasurys or other kinds of debt, which would keep interest rates low and hopefully encourage borrowing.
"They left themselves as much room as they possibly could," said Bill Stone, chief investment strategist at PNC Wealth Management. "In the bond world, the coast is clear for buyers."
Treasurys rose sharply after the Fed's announcement, sending interest rates lower. The yield on the 10-year Treasury note fell sharply to 2.58 percent from 2.70 percent the day before, while its price jumped $1.03 to $100.34. The yield is a common benchmark for setting interest rates on corporate debt and mortgages.
The Fed's statement, which came after a one-day meeting of its interest rate committee, had only a temporary effect on stocks. Hopes had been building that Tuesday would bring news of a specific new bond-purchasing program, and disappointment ensued when one didn't materialize.
Stocks had been trading lower ahead of the Fed's announcement and rallied briefly after the news came out. A late slump erased most of the day's advance from broad market indicators, while the Dow Jones industrial average, which tracks 30 large companies, ended with a meager gain.
The Dow rose 7.41, or 0.1 percent, to close at 10,761.03. It's still up 7.5 percent for September, an unusually large gain for a month that is historically weak for stocks.
The Standard & Poor's 500 index slipped 2.93, or 0.3 percent, to 1,139.78, while the Nasdaq composite fell 6.48, also 0.3 percent, to 2,349.35.
The weakness in broader indexes suggested that a three-week rally on the stock market may be losing steam as stocks start to look expensive to some investors. The S&P 500 is still up 8.6 percent for the month, while the Nasdaq is up even more, at 11.1 percent.
Tom Porcelli, head of U.S. market economics at the Royal Bank of Canada, said there's now a good chance the Fed will decide to add more debt to its books at the next meeting of its rate-setting committee on Nov. 2. But another round of bond buying by the Fed may offer the economy little help, he argued. The last round of Fed purchases had the effect of lowering lending rates by a half a percentage point.
Now, a move by the Fed would have probably less of an impact. Borrowing rates are cheap but borrowing is still weak. "The fact remains that the economic backdrop is the driver of lending not low rates," Porcelli said in a note to clients after the announcement.
In corporate news, steep discounts and higher costs drove ConAgra Foods Inc.'s fiscal first-quarter profit lower. Shares of the company, which owns the Chef Boyardee and Peter Pan foods brands, fell 80 cents, or 3.6 percent, to $21.57.
Cruise line operator Carnival Corp. reported a 22 percent jump in quarterly profits as demand was strong during the summer. It also raised its full-year earnings outlook well above analysts' forecasts. Shares rose 51 cents to $37.57.
The dollar fell against other major currencies, while gold prices continued to hover near record highs.
Falling stocks outnumbered rising ones two to one on the New York Stock Exchange, where consolidated volume came to 4.2 billion shares.