CVX Chevron Corporation

By Avantika Chilkoti and Karen Langley 

U.S. stocks edged higher Wednesday after the Federal Reserve announced it was holding its benchmark interest rate steady and signaled no appetite to raise it soon.

The S&P 500 closed 0.3% higher and the Nasdaq Composite rose 0.4%, slightly higher than their levels before the Fed's announcement. The Dow Jones Industrial Average, weighed down by declines in shares of Chevron and Home Depot, reversed earlier losses to be up 0.1%.

Fed officials in their policy statement expressed an upbeat view of the economy, with new projections showing most officials believe rates are low enough to stimulate growth.

Investors are in the midst of a busy few days as the U.S. and European central banks hold policy meetings that will provide fresh assessments of key economic indicators, as well as a general election in the U.K. that could prove to be a turning point for Brexit.

The Fed's decision to hold rates steady had been expected. The U.S. central bank had cut interest rates at its past three meetings, but Chairman Jerome Powell had indicated both that there is a very high bar for the Fed to raise rates and that the economic outlook would need to weaken materially to consider lowering them further.

"I do think we're finally at the point where maybe monetary policy will become less of what we need to watch, and instead it will be more focused on the company fundamentals and the fundamentals of the economy, " said Ron Temple, head of U.S. equity at Lazard Asset Management.

Meanwhile, fresh data Wednesday showed consumer prices rose moderately in November, indicating inflation has remained in check despite historically low unemployment and the trade conflict with China. The inflation numbers aren't likely to sway the Fed's interest-rate decision.

Investors were also continuing to parse headlines for indications on the progress of the U.S.-China trade talks, after the The Wall Street Journal reported Tuesday that negotiators from both sides were preparing to delay fresh U.S. tariffs on Chinese imports due to go into effect on Dec. 15.

Some analysts remain concerned that existing tariffs imposed on Chinese imports are already starting to hurt the U.S. economy.

"It's going to come home to roost for the one element of the U.S. economy that has always, always, always pulled the economy out of any slump and that's the U.S. consumer," said Matt Cairns, a rates strategist at Rabobank.

Shares of Chevron fell 1.3% after the oil giant wrote down the value of its assets by more than $10 billion and lowered its forecast for commodity prices.

Home Depot dropped 1.8% after forecasting fiscal 2020 same-store sales below Wall Street expectations. Shares of Children's Place declined 24% after the retailer's third-quarter sales missed analysts' estimates and it reduced its revenue forecast. GameStop declined 18% after the videogame retailer cut its financial guidance following worse-than-expected quarterly results.

The yield on the benchmark 10-year Treasury was 1.802%, down from 1.833% Tuesday.

In Europe, the U.K.'s FTSE 250 equity index slipped 0.6% ahead of a general election scheduled for Thursday that will help determine the course of the U.K.'s withdrawal from the European Union.

Some opinion polls show Prime Minister Boris Johnson's lead narrowing, and a new, closely watched YouGov poll couldn't rule out a hung Parliament. It showed that Mr. Johnson's Conservative Party is set to win a majority of 28 seats, down from a 68-seat majority forecast in a survey last month.

The state-backed oil major Saudi Arabian Oil Co., which was among the most closely watched stocks, gained 10% by the close of trading in Riyadh. That was the upper limit for the stock, which made its debut after the world's largest initial public offering.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Karen Langley at karen.langley@wsj.com

(END) Dow Jones Newswires

December 11, 2019 16:46 ET (21:46 GMT)

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