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Tuesday, March 19, 2024
March 19, 2024

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Dow hits record as Fed stands pat on interest rate

The Columbian
Published:

NEW YORK — The stock market got the reassurance it wanted from the Federal Reserve on Wednesday.

The U.S. central bank signaled that it would keep its short-term interest rate near zero for a while yet, and investors pushed the Dow Jones industrial average to a record high. Low rates have been a boon to the market by helping stimulate the economy and making stocks a more attractive investment than bonds.

“The Fed is not going to take the punch bowl away,” said Brad McMillan, chief investment officer for Commonwealth Financial. “They didn’t want to spook the market.”

Major indexes drifted before the Fed released a statement at 2 p.m. signaling little change in its interest rate policy. Stocks in all three U.S. major indexes rose. The gains were small, but broad. Seven of the 10 industry groups of the Standard & Poor’s 500 index rose, led by materials stocks.

In its statement following a two-day policy meeting, the central bank retained language that it plans to keep short-term rates at a record low for “a considerable time” after it ends its monthly bond purchases in November. Many investors interpret that to mean the first hike won’t come until the middle of next year.

The Dow gained 24.88 points, or 0.2 percent, to end at 17,156.85 — its 16th record high this year. The S&P 500 edged up 2.59 points, or 0.1 percent, to 2,001.57, falling short of its own closing high of 2,007.71 from Sept. 5.

The Nasdaq composite finished higher by 9.43 points, or 0.2 percent, to 4,562.19, still well below its dot-com era peak.

• DuPont surged $3.42 to $69.25, or 5.2 percent, the biggest gain in the Dow by far. Investors bought the stock on news that activist investor Nelson Peltz had sent a letter to the company’s board suggesting it split in two. His Trian Fund Management LP said it has been in private talks with DuPont for more than a year to boost shareholder value and improve its financial performance.

• General Mills, the food company behind Cheerios cereal and Yoplait yogurt, fell $2.35, or 4.4 percent, to $50.83 after reporting disappointing quarterly results.

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