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Wall Street loses ground as Fed signals two more hikes this year

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(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.

A ruling that approved AT&T’s (T.N) $85 billion deal to buy Time Warner (TWX.N) put the spotlight on media and telecom shares, which mostly rose.

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.

Twenty-First Century Fox (FOXA.O) surged 6.9 percent as Comcast Corp (CMCSA.O) is expected to outbid Walt Disney (DIS.N) for some of its assets.

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

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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