US stocks up amid interest rate freeze despite tech battering
US stocks have risen after the US Federal Reserve left its key interest rate unchanged, as investors expected.
Energy companies climbed again as the price of oil came close to a six-month high, although te chnology stocks were battered following weak results from Apple and Twitter.
Stocks opened mostly lower in muted early trading, but they moved higher after the Fed released its decision on interest rates.
Bond yields fell and investors bought high-dividend phone and utility companies instead. Thanks to the losses for tech stocks, the Nasdaq composite index fell for the fifth day in a row.
The Dow Jones industrial average picked up 51.23 points, or 0.3%, to 18,041.55. The Standard & Poor's 500 index rose 3.45 points, or 0.2%, to 2,095.15. The Nasdaq composite index dropped 25.14 points, or 0.5%, to 4,863.14.
The Federal Reserve noted that economic growth in the US has slowed down over the last month, but the job market is getting stronger.
While the Fed also said the global economy slowed, its statement suggests it is becoming less concerned about the effects of the slowing global economy on the US.
Bond prices were rising before the Fed's announcement and moved even higher after its statement was released. Higher prices mean lower yields, and the yield on the 10-year US Treasury note fell to 1.86% from 1.93%.
Lower bond yields made telecommunications and utility stocks more appealing to investors seeking income. Verizon Communications gained 1.25 dollars (92p), or 2.5%, to 51.69 dollars (£34.54). NRG Energy added 43 cents, or 3%, to 14.98 dollars (£10.30).
The price of crude oil started with big gains, turned lower, and then bounced back. It wound up at its highest price since early December. Benchmark US crude oil rose 1.29 dollars, or 2.9%, to close at 45.33 dollars (£31.17) a barrel in New York. Brent crude, the international standard, added 1.44 dollars (99p) , or 3.1%, to 47.18 dollars (£32.44) a barrel in London.
Among energy stocks, Anadarko Petroleum added 2.42 dollars (£1.66), or 4.6%, to 54.78 dollars (£37.66) and Diamond Offshore Drilling gained 98 cents, or 4.1%, to 24.63 dollars (£16.93).
Tech stocks fell after Apple, the most valuable public company in the world, said iPhone sales declined in the first quarter.
That has not happened since iPhones went on sale in 2007. Apple also reported its first decline in quarterly revenue since 2003 and forecast similar results in the current quarter. Its stock skidded 6.53 dollars (£4.49), or 6.3%, to 97.82 dollars (£67.26).
Microblogging site Twitter dropped 2.89 dollars (£1.98), or 16.3%, to 14.86 dollars (£10.21) after its first-quarter revenue fell short of expectations and its outlook disappointed investors. Its stock has fallen 71% in the last year.
Earnings reports were responsible for much of the day's action. Aerospace giant Boeing was the biggest gainer on the Dow average. The company reported mixed first-quarter results, with weaker-than-expected earnings but strong sales. The stock rose 3.84 dollars (£2.64), or 2.9%, to 137.08 dollars (£94.26).
Medical device maker Boston Scientific climbed to its highest price in 10 years after it after it swung to a profit in the first quarter, with earnings and sales that were better than expected. It also raised its projections for the year. The stock gained 11.2%, to 21.89 dollars (£15.05).
DreamWorks Animation rocketed 5.08 dollars (£3.49), or 18.7%, to 32.20 dollars (£22.14) on reports the company behind the Shrek and Kung Fu Panda franchises might be acquired by Comcast. Comcast stock rose two cents to 61.30 dollars (£42.15).
Struggling Internet company Yahoo will add four directors backed by activist investment firm Starboard Value to its board. That ends a potential proxy fight between Yahoo and Starboard. The new directors include Starboard CEO Jeffrey Smith. Two current Yahoo directors won't run for new terms. Yahoo stock lost 16 cents to 36.95 dollars (£25.40).