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Stocks fall after Fed cuts rates but gives mixed signals; dollar up

Published 2019-09-18, 02:50 p/m
© Reuters.  Stocks fall after Fed cuts rates but gives mixed signals; dollar up
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* U.S. Treasury yields rise; gold slips

* Oil prices cool after Saudi pledge on production

By Saqib Iqbal Ahmed

NEW YORK, Sept 18 (Reuters) - Wall Street stocks slipped on Wednesday after the U.S. Federal Reserve gave mixed signals about what may happen next after it cut interest rates by a quarter of a percentage point for the second time this year in a widely expected move.

The dollar rose against the yen and the euro, while U.S. Treasury yields edged higher in choppy trading.

In lowering the benchmark overnight lending rate to a range of 1.75% to 2.00% on a 7-3 vote, the Fed's policy-setting committee nodded to ongoing global risks and "weakened" business investment and exports. Fed said continued growth and strong hiring are "the most likely outcomes," but nevertheless cited "uncertainties" about the outlook and pledged to "act as appropriate" to sustain the expansion.

The rate cut fell short of the more aggressive reduction in borrowing costs that President Donald Trump had demanded.

"The main concern is there might not be another cut, and that's why you had a little bit of a selloff," said Alan Lancz, president at Alan B. Lancz & Associates, in Toledo, Ohio. "But it's almost like selling on good news. They left the door open for more cuts. It's a really divided Fed right now."

The Dow Jones Industrial Average .DJI fell 164.4 points, or 0.61%, to 26,946.4, the S&P 500 .SPX lost 21.57 points, or 0.72%, to 2,984.13, and the Nasdaq Composite .IXIC dropped 83.66 points, or 1.02%, to 8,102.35.

The MSCI world equity index .MIWD00000PUS , which tracks shares in 47 countries, fell 0.51%.

The dollar index .DXY , which tracks the greenback against a basket of other currencies, was up 0.25% to 98.502.

U.S. Treasury yields crept higher in volatile trading after the rate decision, with benchmark 10-year notes US10YT=RR last up 10/32 in price to yield 1.763%.

Oil prices cooled as Saudi Arabia's pledge to quickly restore production eased worries over supply following a weekend attack on Saudi oil facilities. in the Middle East remained elevated, however. Saudi Arabia on Wednesday displayed remnants of what it described as Iranian drones and cruise missiles used in the attack, calling them "undeniable" evidence of Iranian aggression. Trump ordered a major increase in sanctions on Iran on Wednesday, following repeated U.S. assertions that Iran was behind the attack. crude CLc1 fell 2.48% to $57.87 per barrel and Brent LCOc1 was last at $63.33, down 1.89% on the day.

Gold prices slipped and spot gold XAU= was down 0.25% at $1,498.439 an ounce.

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