U.S. stocks fluctuated after the Standard & Poor’s 500 closed at a record yesterday as the Federal Reserve promised to keep interest rates low amid signs of an economic recovery.
The S&P 500 lost 0.1 percent to 1,954.97 at 11:21 a.m. in New York. The benchmark equity index advanced for four straight days through yesterday. The Dow Jones Industrial Average fell 30.03 points, or 0.2 percent, to 16,876.59. Trading in S&P 500 companies was in line with the 30-day average for this time of day.
“People are really taking a more constructive view to see what happens with the market here going forward,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said by phone. “I think you have to see if the trend continues.”
Global equities rallied yesterday after Fed Chair Janet Yellen said accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. Yellen emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.
The central bank reduced its bond purchases by $10 billion for a fifth consecutive meeting, to $35 billion, leaving it on schedule to end the program this year. The stimulus has helped the S&P 500 rally 189 percent from its bear-market low in March 2009.
“Yellen is a super dove,” Lex Van Dam, a fund manager at Hampstead Capital LLP in London, said in an interview. “There remain very few alternatives for your cash other than putting it in stocks. The trend remains up in markets. I believe in the Fed. The economy has recovered on financial engineering.”