Fed Leaves Rates Unchanged; Dow Soars Again

As expected, the FOMC of the Federal Reserve decided to leave rates unchanged on Wednesday, marking the 7th consecutive meeting the Fed has issued no change in the federal funds rate.

Immediately following the announcement, stocks gyrated, with the Dow zig-zagging in a 50 point range before finally heading higher into the close, setting yet another record. The S&P moved to within 15 points of its all-time high. Despite the Fed offering no surprises, markets reacted positively, as has been the norm of late.

Dow 13,362.87 +53.80; NASDAQ 2,576.34 +4.59; S&P 500 1,512.58 +4.86; NYSE Composite 9,827.93 +39.90

With all eyes on the Fed, there was little else to move markets and volume was moderate.

Advancing issues held sway, beating decliners by an 8-5 margin. New highs outdid new lows 449-71, evidence that investor appetites have not yet been sated.

Possibly the best of the day's news came from the US Department of Energy, which said that stocks of gasoline rose by 400,000 barrels in the week ending May 4. Analysts had forecast a rise of 150,000. The inventory increase was the first in 13 weeks. Crude sold into the news, losing 79 cents to end the day at a moderate $61.47. With heightened demand of the summer driving season looming, this comes as welcome news and could spark a bit of easing of the price at the pump for US drivers.

Keeping with the theme, gold lost $4.90 to $682.50, while silver continued to slide, down another 13 cents to $13.47.

With earnings mostly out of the way and the next Fed meeting not for another 7 weeks, investors will focus on fundamentals and economic news. In the interim, the pace of gains should moderate, as the markets have been red hot of late.