You are using an older browser version. Please use a supported version for the best MSN experience.

Dow closes at another new high after Fed raises key rate

CNBC logo CNBC 12/13/2017 Fred Imbert
UP NEXT
UP NEXT

Stocks ended mostly higher Wednesday after the Federal Reserve felt confident enough in the economy to raise its key lending rate yet again. Traders also assessed news of congressional leaders reaching a tentative agreement on a tax overhaul plan.

The Dow rose 80 points to a record high, with Caterpillar leading advancers. The S&P 500 slipped 0.05 percent, retreating from an all-time intraday high. The Nasdaq gained 0.2 percent.

The Fed was widely expected to raise its benchmark lending rate at this meeting. The central bank also raised its GDP estimate from 2.1 percent in September to 2.5 percent.

"There were no major surprises [in the announcement] and inflation remains below the Fed's target," said Jeff Carbone, a managing partner of Cornerstone Financial Partners. "The one thing to look out for is whether the economy starts to heat up. That could force the Fed to raise rates quicker."

Elsewhere, House and Senate leaders struck a tentative deal to pass sweeping changes to the U.S. tax code. The Associated Press first reported the news, and CNBC later confirmed the report.

The plan would likely lower the corporate tax rate.

"This supports current levels, but I don't think we'll get another significant boost from tax reform," said Jennifer Ellison, principal at Bingham, Osborn & Scarborough. "Some of this was already anticipated a few weeks ago."

The prospect of lower corporate taxes has been a boon for U.S. stocks this year. In economic news, the consumer price index, a key metric used to gauge inflation, rose 0.4 percent last month, as expected. Excluding food and energy, consumer prices rose 0.1 percent.

Treasury yields ticked lower across the board following the data release. The short-term two-year yield fell from 1.85 percent to 1.83 percent, while the benchmark 10-year yield declined from 2.42 percent to 2.39 percent.

In corporate news, Finisar shares surged 28 percent after Apple awarded it $390 million. Finisar makes optical communications components which are used in Apple's iPhone X.

Verizon and AT&T both traded lower after T-Mobile announced it bought Layer3 TV and said it plans to launch "a disruptive new TV service."

T-Mobile shares traded 1 percent higher. Caterpillar's stock climbed more than 3 percent after the company reported strong machine sales for September, October and November.


AdChoices
AdChoices
AdChoices

More from CNBC

image beaconimage beaconimage beacon