The Fed committee members said in the statement that they were “prepared to take further action” if needed. The Fed has said since January that it plans to keep short-term interest rates at “exceptionally low levels” at least through late 2014.
Yields on longer-term U.S. Treasurys initially fell after the Fed announcement, as investors factored in more purchases of securities by the central bank. The yield on the benchmark 10-year note finished the day at 1.640%, compared to about 1.67% prior to the Fed statement.
Prior to the Fed announcement, European markets finished broadly higher, with the Stoxx Europe 600 ending 0.6% higher after Greece’s conservative New Democracy party secured a consensus for a coalition government with the Socialist Pasok party and the Democratic Left party. New Democracy leader Antonis Samaras was also sworn in as prime minister, removing a recent source of market uncertainty.
Procter & Gamble (PG) tumbled 2.9% to lead the Dow decliners after the blue-chip consumer products company lowered its earnings outlook for the current quarter and for the next fiscal year, citing slower-than-expected growth in developed markets. Rivals Colgate-Palmolive CL -0.57% and Kimberly-Clark KMB -1.92% fell 0.6% and 1.9% respectively.
Cisco Systems (CSCO) rose 1.9% after analysts at BMO Capital Markets pushed its target price for the networking giant higher, arguing the current share price doesn’t give the company credit for a strong valuation based on solid business execution.
Burger King Worldwide pared earlier gains to rise 3.5% on its first day of public trading on the New York Stock Exchange.
Thomas Doherty is an undergraduate at Villanova University majoring in Finance and Economics. Thomas@KeeneOnTheMarket.com