U.S. stocks close higher following Fed minutes FOMC minutes reveal taper will end in October NEW YORK (MarketWatch) — The U.S. stocks closed modestly higher on Wednesday after the FOMC minutes revealed that policy-makers decided to end the Fed’s bond purchases by October if the economy stays on track.
The Fed plans to end purchases altogether with a final reduction of $15 billion at its October meeting, after trimming it by $10 billion at each meeting up to that point, while keeping the rates near zero for a considerable time. Investors took that as a bullish sign and pushed prices higher.
The S&P 500 (SNC:SPX) gained 9 points, or 0.5%, to the preliminary 1,972.79. The Dow Jones Industrial Average (DJI:DJIA) closed 79 points, or 0.5%, higher at the preliminary 16,985.68. The Nasdaq Composite (NASDAQ:COMP) rose 27 points, or 0.6%, to 4,419.03.
“In the short-term, we are concerned that there is a bit of optimism about the second-quarter earnings. Expectations for overall markets are high and this may lead to some short-term downside if companies come short,” said Joe Bell, senior equity analyst at Schaeffer’s Investment Research.