WASHINGTON: U.S. stocks closed higher for a fifth-straight day Wednesday, buoyed by the minutes of the Federal Reserve’s May meeting, which eased concerns that the Fed’s plan to trim its $4.5 trillion balance would be aggressive. US stocks rose, following the release of the Fed minutes, which provided more clarity on the process by which the U.S. central bank would shrink its $4.5 trillion balance sheet. According to minutes released Wednesday from the Federal Open Market Committee meeting during 2-3 May, the central bank will announce cap limits on the total amount of maturing bonds it will allow to roll off each month without reinvesting. The process will allow the central bank to gradually shrink its balance sheet, and eases concerns of investors, who were unsure whether the central bank would seek to adopt an aggressive approach to reducing its balance sheet.
Interest rate expectations remained unchanged, following the release of the Fed minutes as bullish sentiment concerning the need to increase interest rates “soon” was offset somewhat by a dovish sentiment expressed among Fed members. Some Fed officials said, signs were needed to show weakness in the first-quarter economic growth was temporary, prior to future rate hikes. The Dow Jones Industrial Average closed at 21,012.42, up 0.36%. The S&P 500 closed in record territory, up 0.25%, while the Nasdaq Composite closed at 6163.02, up 0.40%. The top Dow gainers; Goldman Sachs Group Inc (NYSE:GS) up 1.9% Coca-Cola Company (NYSE:KO) up 1.4%, while E I du Pont de Nemours & Co (NYSE:DD) rose 1.3%. General Electric Company (NYSE:GE) down 1.6%, Verizon Communications Inc (NYSE:VZ) down 1% and Cisco Systems Inc (NASDAQ:CSCO) down 0.9%, were among the worst Dow performers of the session.
