US stocks recover as Fed signals no 2019 rate hikes

Bloomberg

US equities erased earlier losses after the Federal Reserve signalled that it won’t raise rates this year, saying economic growth has slowed. Ten-year Treasury yields narrowed and the dollar fell.
As was widely expected, the central bank didn’t announce an interest-rate increase on Wednesday and took any hike off the table for 2019. That dovish turn was enough to lift the S&P 500 Index out of its session-long funk.
“There was a lot of anticipation that the Fed was going to validate in this meeting the dovish pivot they put into place in January, and I think that’s what they’ve delivered here,” Jeffrey Rosenberg, chief fixed-income strategist for BlackRock Financial Management, said on Bloomberg Television.
Leading up to the Fed announcement, most stocks had been under pressure after President Donald Trump said tariffs on Chinese goods will remain in place until the nation complies with a trade deal that has yet to be sealed, while energy shares gained after an unexpected drop in US crude inventories briefly pushed oil prices over $60 a barrel for the first time since November.
In Europe, a raft of negative corporate news dragged down the Stoxx Europe 600 Index. Germany’s DAX Index led the retreat as BMW AG warned earnings would fall and chemical maker Bayer AG headed for the biggest drop in 15 years after losing the first phase of a US trial over claims its weed killer caused cancer.
In Asia, Japanese shares finished higher, while most other markets dipped.
The pound fell as UK Prime Minister Theresa May sought to extend the Brexit deadline, while the opposition called for the public to have the final say over the country’s EU exit. The euro gained after German producer prices missed estimates. European sovereign bonds gained.
Company earnings this week include Tencent, Hermes, Tiffany, Micron, Nike and PetroChina. Central banks in the UK, the Philippines and Indonesia are all scheduled for policy meetings.
Euro-zone purchasing manager survey numbers on Friday will give an indication of the health of the region’s industrial and service sectors.
The S&P 500 Index gained less than 0.05 percent in New York. The Stoxx Europe 600 Index declined 0.9 percent. The UK’s FTSE 100 Index fell 0.5 percent. The DAX Index sank 1.6 percent, its biggest tumble in almost six weeks. The MSCI Emerging Market Index gained 0.1 percent.
The Bloomberg Dollar Spot Index fell 0.3 percent to a six-week low. The euro advanced 0.5 percent to $1.1411, the strongest in over six weeks. The British pound sank 0.4 percent to $1.321. The Japanese yen climbed 0.3 percent to 111.05 per dollar.
The yield on 10-year Treasuries decreased five basis points to 2.56 percent, a 10-week low. Germany’s 10-year yield declined one basis point to 0.08 percent. Britain’s 10-year yield dipped three basis points to 1.157 percent.
West Texas Intermediate crude gained 1.3 percent to $59.80 a barrel, a four-month high. Gold rose 0.5 percent to $1,313.24 an ounce.