The US stock markets dropped today after the Federal Reserve said the domestic economy was growing at a solid pace, signaling (again) it remains on track to raise interest rates later this year.
By Paolo Palazzi-Xirinachs
Thursday, January 29, 2015
Both the Dow and S&P 500 fell more than 1%, but Apple helped limit the Nasdaq's decline. The tech giant jumped 6.1% after its results were reported. The Dow Jones fell 189.67 points to 17,197.54, the S&P 500 lost 27.06 points to 2,002.49 and the Nasdaq Composite dropped 43.50 points to 4,637.99.
Fed announces US economy is growing
All of this was precipitated by the Fed announcing that the US economy was expanding "at a solid pace" as it largely looked through weakness overseas in a signal that it remains on track to raise interest rates later this year. The US central bank repeated it would be "patient" in deciding when to raise benchmark borrowing costs from zero, where they have been stuck since late-2008. However, after a two-day meeting, policymakers struck an upbeat tone on the US economy's prospects and held to their view that energy-led weakness in inflation would dissipate. "Economic activity has been expanding at a solid pace," the Fed's policy-setting panel said in a statement that marked an upgrade to its prior assessment of a "moderate pace" of growth.
Facebook mobile ads fuel growth
In other market news, Facebook reported quarterly revenue that topped analysts’ estimates, fueled by the mobile advertising business. The social network’s fourth-quarter sales totaled $3.85 billion, exceeding the average analysts’ prediction of $3.77 billion, according to data compiled by Bloomberg. The percentage of ad sales from mobile phones was 69%, up from 66% in the third quarter, the company said in a statement Wednesday. Profit excluding some items was 54 cents a share, compared with 48 cents projected on average by analysts.
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