Blue chips dip after Fed

[notiCIas]

Blue chips dip after Fed

Dow industrials slip, Nasdaq and S&P 500 little changed after expected rate hike, "measured" pledge.

June 30, 2005: 2:26 PM EDT



NEW YORK (CNN/Money) - Blue chips dipped and the broader market stalled Thursday afternoon after the Federal Reserve boosted short-term interest rates by a quarter-percentage point, as expected, and pledged to continue raising rates at a "measured pace."

The Dow Jones industrial average (down 5.44 to 10,369.04, Charts) lost a few points at around 2:25 p.m. ET.

The broader Standard & Poor's 500 (up 0.61 to 1,200.46, Charts) index and the Nasdaq composite (up 4.78 to 2,073.67, Charts) were both little changed.

The major gauges had been flat just before the announcement.

The Federal Reserve announced another quarter-point interest-rate hike at around 2:15 p.m. ET, at the conclusion of its two-day policy meeting. The move was widely expected. It was the ninth in a row, bringing the central bank's fed funds rate, an overnight bank lending rate, to 3.25 percent.

What was of more interest to Wall Street was what the Fed's statement implied about future rate hikes. Recent mild economic news has led some investors to bet that the central bank may pause in its rate-hiking campaign, perhaps after another quarter-point increase in August.

But the statement did not seem to indicate a pause, which is more in tune with what many economists say.

Treasury bonds showed little reaction, remaining higher after the news. The gains lowered the yield on the 10-year note to 3.96 percent from 3.98 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar remained flat against the euro and higher versus the yen.