After dropping steeply on news from the U.S. Department of Commerce that the economy had slowed in the first quarter, stocks bounced back on a statement from the Federal Reserve’s policy committee signaling the timing of a rate hike for the third quarter.
But the gains didn’t last, the major indices finished the day in the red. The Dow Jones Industrial Average fell 0.41 percent to 18,305 while the S&P 500 lost 0.37 percent to finish at 2,107. The Nasdaq dropped 0.62 percent to close at 5,024.
In the retail and fashion apparel sector, stocks finished mostly in the red. To see the complete list of stock closings in the retail, fashion, beauty and apparel segments, check out the WWD Global Stock Tracker by clicking here.
Earlier Wednesday, the Commerce Department said the annualized gross domestic product grew 0.2 percent in the first quarter – well below the 1 percent gain economists expected. IHS Global Insight chief economist Doug Handler said in a research note that market conditions will likely lead to downwardly revised GDP estimates for the second quarter. But the economist said conditions will likely improve in the second half of the year.
Later in the day the Fed cited weakness in the labor market as cause to consider when to raise interest rates. Analysts note there are lots of moving parts in the decision-making of raising rates, which include the strength of the dollar, crude oil prices, employment, retail sales and consumer confidence, among other factors. After the statement, analysts and economists as well as investors were still left wondering if and when a rate hike would occur.
In a separate research note, Handler’s IHS colleague Paul Edelstein said when “the history of the recovery from the financial crisis is written, 2015 will be remembered as the year of ‘peak Fed,’ as speculation about the timing of the Fed’s first tightening move runs rampant. Today’s FOMC meeting and policy statement offered little to clarify the matter.”