US stocks extend gains amid Fed minutes

New York, Jan 5 (IANS) US stocks rallied on Wednesday as Wall Street digested minutes from the Federal Reserve’s December meeting released in the afternoon.

The Dow Jones Industrial Average rose 60.40 points, or 0.30 per cent, to 19,942.16, Xinhua news agency reported.

The S&P 500 added 12.92 points, or 0.57 per cent, to 2,270.75. The Nasdaq Composite Index was up 47.92 points, or 0.88 per cent, to 5,477.00.

According to the minutes, policy makers agreed that information received over the intermeeting period indicated that the labor market had continued to strengthen and that economic activity had been expanding at a moderate pace since midyear.

“Most participants judged that a gradual pace of rate increases was likely to be appropriate to promote the Federal Open Market Committee’s (FOMC) objectives of maximum employment and 2 per cent inflation,” said the minutes.

The Fed raised interest rates at its December meeting for just the second time in a decade and forecast three rate hikes for 2017.

“Today’s FOMC minutes are a good example of it’s hard to trade on Fed communications: the market was right in thinking the minutes would tilt hawkish, but they tilted less than expected and bond yields fell before settling back at unchanged on the day,” said Chris Low, chief economist at FTN Financial, in a note.

There is no major economic data due out Wednesday, markets will focus on Friday’s non-farm payrolls report for more clues on the country’s economic situation.

In corporate news, shares of General Motors Company surged 5.52 per cent to $37.09 apiece after the car-maker reported its best December sales since 2007.