Credit: Shutterstock photoOne of the more telegraphed rate hikes in recent memory came to fruition Wednesday when the Federal Reserve raised its key lending rate to 1.25% to 1.5%.
The Fed also lifted its 2018 GDP outlook to 2.5% growth from 2.1%. It's projecting three rate hikes next year.
[ibd-display-video id=3021370 width=50 float=left autostart=true] The stock market strengthened a bit on the news, with the Dow Jones industrial average and S&P 500 on pace for record closing highs, a common occurrence in recent days.
Caterpillar ( CAT ) and Nike ( NKE ) led the Dow higher, rising nearly 4% and 3%, respectively. Earnings from Nike are due Dec. 21 after the close. The athletic footwear and apparel maker has gotten its house in order after a lengthy period of sluggish price performance. Nike cleared a 57.35 cup-with-handle buy point and is well extended from it.
Small caps fared the best in late-afternoon trading, with the Russell 2000 up 0.8%. The Dow added 0.6%, the Nasdaq composite was up 0.4% and the S&P 500 gained 0.3%. Volume on the NYSE and Nasdaq was tracking close to Tuesday's levels in the stock market today.
The 10-year Treasury yield eased 3 basis points to 2.37% on the heels of the Fed decision.
Among the day's movers, Apple ( AAPL ) added 0.6% to 172.67 after the company said it will invest $390 million in fiber-optic name Finisar ( FNSR ), which makes laser chips for the iPhone X and AirPods. Apple has been holding gains nicely after a breakout over a 160.97 handle buy point. Finisar broke out of a downtrend Wednesday, soaring 22.5%.
Inside the IBD 50 , several growth names outperformed, including RV maker Winnebago Industries ( WGO ). Shares jumped nearly 4% to 57 as the stock sits well extended from a 37.30 buy point cleared in September. Earnings are due Dec. 20 before the open. Leaderboard name PRA Health Sciences (PRAH) cleared a base with an 84.47 buy point, rising 4% to 88.09. China-based YY Inc . (YY) and Arista Networks (ANET) showed gains of more than 2%.
IBD 50 component Adobe Systems (ADBE) added 2% as it finds support at the 50-day moving average. It was featured as a potential call-option play in the latest Earnings Preview column. Earnings are due Thursday after the close.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
