U.S. stocks are taking small losses Wednesday after the Federal Reserve raised interest rates and said it expects to raise rates two more times by the end of the year. Banks are making the biggest gains as they stand to make more money on lending. Bond yields are rising and big-dividend stocks like real estate investment trusts are falling.
A federal court ruled that AT&T’s $85 billion purchase of Time Warner can proceed, and that’s sending ripples through the market as investors bet that hundreds of billions’ worth of deals in the media, telecommunications and health care industries stand a better chance of getting approved.
KEEPING SCORE: The S&P 500 index fell 7 points, or 0.3 percent, to 2,779 as of 2:30 p.m. Eastern time. On Tuesday the benchmark index closed at its highest level since late January, when investors began worrying about a sharp pickup in inflation. Those concerns have since eased. The Dow Jones industrial average lost 61 points, or 0.2 percent, to 25,259.
The Nasdaq composite gave up an early gain and fell 7 points, or 0.1 percent, to 7,695. The Russell 2000 index of smaller-company stocks lost 7 points, or 0.4 percent, to 1,675. Both of those indexes finished at record highs Tuesday.
FED GOING FOR FOUR: Policymakers at the Federal Reserve plan to raise interest rates four times this year, as they expect inflation to increase at a faster pace and slightly exceed their target of 2 percent. Their projections show unemployment falling to a 50-year low later this year. The increase in rates Wednesday was the second this year.
The decision sent stocks lower, as many investors hoped the Fed would only raise rates three times this year. But the Fed’s view didn’t come as a shock after months of signs that economic growth