Off The Wire
Wall Street loses ground as Fed signals two more hikes this year
(Reuters) - U.S. stocks lost some ground and were trading lower on Wednesday after the Federal Reserve raised interest rates as expected and projected a slightly faster pace of rate hikes in the coming months.
Two additional hikes are now expected by the end of this year, compared to one previously.
In its decision Wednesday, the Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent.
“The fact they’re talking about four rate hikes this year instead of three is disappointing. Everybody knew they were going to hike in June. People thought they might pause in September. It doesn’t look like they’re going to do that,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
One worry about higher rates is that they will weigh on economic growth, he said.
At 2:30 p.m. ET, the Dow Jones Industrial Average .DJI fell 58.17 points, or 0.23 percent, to 25,262.56, the S&P 500 .SPXlost 6.8 points, or 0.24 percent, to 2,780.05 and the Nasdaq Composite .IXIC dropped 6.28 points, or 0.08 percent, to 7,697.51.
S&P 500 financials .SPSY, which tend to benefit from higher rates, were up 0.7 percent.
Shares of HBO channel owner Time Warner rose 2.6 percent. AT&T dropped 5.5 percent, sending the S&P telecom services index .SPLRCL down 3.9 percent.
Declining issues outnumbered advancing ones on the NYSE by a 1.91-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners.
The S&P 500 posted 40 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 151 new highs and 24 new lows.
Additional reporting by Sinead Carew in New York and Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski