Retail stocks climbed 0.6 percent Wednesday as the Federal Reserve reaffirmed its intention to keep short-term interest rates near zero for “an extended period.”
The Federal Open Market Committee, led by Fed chairman Ben Bernanke, said it appeared “economic activity has continued to strengthen and that the deterioration in the labor market is abating.” Unemployment, however, continues to reside at 10 percent.
The benchmark federal funds rate will be held to a range of 0 to 0.25 percent. But the decision was not unanimous. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, dissented, believing economic conditions have changed enough that the rate should not be kept at current levels for an extended period.
Government efforts to get the economy growing again have pumped billions of dollars into the economy and sparked some concerns about inflation, which would likely have to be addressed with higher interest rates.
The S&P Retail Index rose 2.17 points to 400.17 as the Dow Jones Industrial Average advanced 0.4 percent, or 41.87 points, to 10,236.16. Fashion’s gainers included Perry Ellis International Inc., up 10.4 percent to $16.82; Destination Maternity Corp., 4.2 percent to $21.36; Columbia Sportswear Co., 3.7 percent to $41.88; AnnTaylor Stores Corp., 2.2 percent to $12.58, and The TJX Cos. Inc., 0.8 percent to $38.39.
• International Declines: European stocks slid, with the CAC 40 down 1.2 percent to 3,759.80 in Paris and the FTSE 100 off 1.1 percent to 5,217.47 in London. Asian markets were also down and the SSE Composite Index fell 1.1 percent to 2,986.61 in Shanghai as the Nikkei 225 dipped 0.7 percent to 10,252.08 in Tokyo and the Hang Seng Index fell 0.4 percent to 20,033.07 in Hong Kong.