US close: Wall Street picks up confidence from Fed statement

US stocks took confidence from the Federal Reserve's more confident statement released late in Wednesday's session to regain some of the losses from Friday and Monday.

Although the US central bank held interest rates steady, as expected, subtly different language emerging from the Fed suggested to economists and traders that a rate hike is not far away, with a possible September lift-off still on the cards.

The Dow Jones Industrial Average closed up 121.1 points to 17,751.39 by the close, a 0.69% increase, while the S&P 500 gained 15.3 points or 0.73% and the Nasdaq put on 22.5 points or 0.44%.

The two-day meeting of the Federal Open Markets Committee came to an end and was celebrated with the customary press release.

Wednesday's statement stated the FOMC needed to see only “some further improvement” in the labour market before a rate rise, which economists excitedly pointed out was different from June’s stance that “further improvement” was needed.

Also on the labour market, the Fed described job gains as “solid” and said that the underutilization of labour resources “has diminished since early this year”, an upgrade from “diminished somewhat” in June.

The committee said that “economic activity has been expanding moderately in recent months” and dropped a previous reference to activity having changed little.

Economists at BNP Paribas said the change in language was "an explicit signal" that a first rate hike is closer.

Capital Economics was less confident, saying the tweaks of language "fall well short" of a clear hint that a rate hike is coming in September, although a large majority of officials expecting one or two rates to rise this year suggested there was "a good change that rates will rise at two of the three meetings left this year, with September still very much in play".

Mortgage and pending home data

Applications for US home mortgages grew last week, data released on Wednesday showed. The Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 0.8% in the week ended 24 July.

Meanwhile, US pending home sales fell unexpectedly in June, with index from the National Association of Realtors declined 1.8% month-on-month in June, pulling back from a nine-year high to settle at 110.3.

Elsewhere, in Europe most equity indices were in the black, save Italy's, following a stabilisation in China’s equity markets and a slew of well-received earnings reports.

The dollar fell 0.34% against the pound but was flat against the yen and rose 0.29% against the euro, while gold futures slid 0.18% to $1,094.20.

Oil prices fell, with West Texas Intermediate losing 0.86% to $47.57 a barrel, while Brent shed 0.62% to $52.97 a barrel.

Twitter tumbles, US Steel strengthens

In company news, Twitter plunged 9.55% after investors were left unimpressed late on Tuesday by the group’s user growth.

Fellow internet group Yelp tanked 27.1% after swinging to a second-quarter loss of $1.3m from a profit of $2.7m a year ago.

Going the other way, United States Steel shares climbed strongly as the metal manufacturer announced plans to cut down on its raw material inventory by idling its Fairfield, Alabama blast furnace.

Elsewhere, Citrix Systems jumped 7.4% after its quarterly results beat expectations.

After hours

Social media giant Facebook reported better earnings after the close, 50 cents per share versus the 47 expected, but saw its shares slip due to higher expenses. Statutory total expenses jumped 82% to $2.8bn, or up 57% on an underlying basis, both of which outpaced revenue growth of 39%. Net income fell 9% year-on-year.

S&P 500 - Risers
United States Steel Corp. (X) $20.04 +13.03%
Citrix Systems Inc. (CTXS) $75.27 +8.10%
Cerner Corp. (CERN) $73.43 +7.21%
Northrop Grumman Corp. (NOC) $173.44 +6.18%
Noble Corporation plc (NE) $13.24 +5.33%
Nabors Industries Ltd. (NBR) $12.26 +5.24%
First Solar Inc. (FSLR) $45.54 +4.98%
Rowan Companies plc (RDC) $18.22 +4.83%
Adt Corp (ADT) $34.48 +4.77%
Anadarko Petroleum Corp. (APC) $76.28 +4.71%

S&P 500 - Fallers
CONSOL Energy Inc. (CNX) $16.68 -6.03%
International Paper Co. (IP) $46.99 -3.57%
Range Resources Corp. (RRC) $42.65 -2.87%
Precision Castparts Corp. (PCP) $196.21 -2.56%
Alexion Pharmaceuticals Inc. (ALXN) $198.46 -2.50%
Rockwell Automation Inc. (ROK) $116.34 -2.46%
Celgene Corp. (CELG) $132.14 -2.42%
Vertex Pharmaceuticals Inc. (VRTX) $125.62 -2.09%
Biogen Inc (BIIB) $313.34 -2.06%
Wynn Resorts Ltd. (WYNN) $96.03 -2.02%

Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $46.29 +2.10%
Merck & Co. Inc. (MRK) $58.54 +1.77%
Visa Inc. (V) $76.01 +1.70%
Boeing Co. (BA) $144.14 +1.64%
Verizon Communications Inc. (VZ) $46.56 +1.46%
Home Depot Inc. (HD) $116.37 +1.33%
JP Morgan Chase & Co. (JPM) $68.94 +1.31%
Nike Inc. (NKE) $114.92 +1.28%
Walt Disney Co. (DIS) $119.84 +1.16%
Pfizer Inc. (PFE) $35.76 +1.16%

Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $55.46 -0.79%
Caterpillar Inc. (CAT) $77.33 -0.58%
Apple Inc. (AAPL) $122.99 -0.32%

Nasdaq 100 - Risers
Vimpelcom Ltd Ads (VIP) $5.94 +15.79%
Citrix Systems Inc. (CTXS) $75.27 +8.10%
Verisk Analytics Inc. (VRSK) $78.60 +7.32%
Cerner Corp. (CERN) $73.43 +7.21%
CH Robinson Worldwide Inc (CHRW) $69.87 +4.71%
Stericycle Inc. (SRCL) $140.26 +4.20%
Keurig Green Mountain Inc (GMCR) $74.76 +4.12%
Expeditors International Of Washington Inc. (EXPD) $46.67 +3.00%
Fiserv Inc. (FISV) $87.81 +2.53%
Gilead Sciences Inc. (GILD) $115.71 +2.33%

Nasdaq 100 - Fallers
Alexion Pharmaceuticals Inc. (ALXN) $198.46 -2.50%
Celgene Corp. (CELG) $132.14 -2.42%
Vertex Pharmaceuticals Inc. (VRTX) $125.62 -2.09%
Henry Schein Inc. (HSIC) $146.53 -2.07%
Biogen Inc (BIIB) $313.34 -2.06%
Wynn Resorts Ltd. (WYNN) $96.03 -2.02%
Check Point Software Technologies Ltd. (CHKP) $81.35 -1.62%
Autodesk Inc. (ADSK) $50.09 -1.57%
Express Scripts Holding Co (ESRX) $91.29 -1.18%
Regeneron Pharmaceuticals Inc. (REGN) $546.27 -1.12%