Market Wrap: Market Closes Lower After Fed Decision
The U.S. stock market pared some of its early session losses, but still finished in the red after the Fed decided to keep its benchmark rate at 5.25% for the fourth time in a row. While the decision did not do much to move stocks, it did note a “substantial cooling in the housing market.” That should keep investors on their toes as we head into the new year.
Seventeen of the Dow 30 were down today – including Caterpillar , which fell on news of slow sales from competitor Agco . Shares of Citigroup also fell after that big management shake-up yesterday, and Best Buy finished the day lower after a weaker-than-expected third-quarter earnings report.
With the majority of the index in the red, Dow component General Electric (the parent company of CNBC) managed to surge after the company boosted its dividend and predicted strong profit growth in the coming year.
Another winner on the day: Sabre Holdings , which closed higher after it announced it would be taken over by two private equity firms.
And Goldman Sachs announced fourth-quarter earnings were up 93% - making it the third consecutive year of record earnings for the firm and the most profitable quarter of all time on Wall Street. That wasn't good enough for traders, though. Goldman still closed lower on the session.
In currencies, the U.S. dollar also fell against the Euro - the most in over a week - after speculation that today's Fed decision could pave the way for rate cuts in 2007.
And on the commodity front, the price of a barrel of crude oil fell to a two-week low, dropping 27 cents to $60.95. Forecasts show that warm weather in most of the U.S. will continue, and that means less demand for heating oil.