Stocks lurch downward after Fed news

January 28 04:38 2016

Stocks dove into negative territory after the Federal Reserve signaled Wednesday that its previous plans for rate hikes this year are still a “go.” The U.S. central bank broke from a two-day meeting at 2 p.m. ET and issued its latest policy statement. Wall Street was eagerly awaiting clues as to whether the Fed will dial back its aggressiveness on rate hikes in 2016. The Dow and S&P 500 were slightly positive leading into the announcement and turned negative a few minutes later. The Nasdaq, down for most of the day, sank lower as well. None of the three hit their earlier session lows of the morning, however.AP FINANCIAL MARKETS WALL STREET F USA NY

The Dow Jones industrial average was down  about 80 points, or 0.5%. The broader Standard & Poor’s 500 was off 0.2% and the Nasdaq composite was 1% lower. The Fed, which raised rates off zero back in December, has said it is looking to add an additional four quarter-point hikes this year. But that pace of hikes now seems aggressive to Wall Street given the market volatility and slowing growth at the start of 2016. “It’s not what the Fed does today, but more about what it says that matters for risk assets,” Thomas Tzitzouris, a fixed income strategist at Strategas Research Partners, told clients in a research note. “The Fed appears unlikely to do anything today, but what the central bank says will determine if March rate hike odds push closer to zero, and with it brings … a broader relief rally.”

Gains in the the Dow being held back by two of its well-known components. Apple (APPL) shares were down about 5% after the company topped quarterly profit estimates but said sales of iPhones came in at the slowest pace since its introduction. Shares of Boeing (BA) cratered more than 6% after the airplane maker cut its full-year profit and sales forecast way below Wall Street estimates. Stocks once again were following oil prices – initially falling as oil slipped and then recovering after oil rallied.  U.S.-produced crude was up 3% to $32.47 after earlier falling as low as $30.14 a barrel.

Asian markets were mixed with China’s Shanghai composite index dropping 0.5% to close at 2,735.56, after diving 6.4% on Tuesday, its lowest level since December 2014. Japan’s Nikkei 225 index gained 2.7% to close at 17,163.92 while Hong Kong’s Hang Seng index rose 1% to finish at 19,052.45. European shares were higher: Germany’s DAX index was up 0.2%, France’s CAC 40 rose 0.2% and Britain’s FTSE 100 gained 0.8%.