The ISM Non-Manufacturing Index for October unexpectedly fell to 50.6 from 50.9 in September, while the forecast was for the index to rise to 51.5. The index for new orders rose to 55.6 from 54.2.
The Federal Open Market Committee concluded its two-day meeting and kept its fed funds target at a range of 0.00-0.25%. It stated that the federal funds rate would be kept “exceptionally low” for an “extended period”. The Fed noted that economic activity has continued to pick up and conditions in financial markets were relatively unchanged. The Fed noted an increase in activity in the housing sector and an expansion of consumer spending but that the household sector remains constrained.
The Fed maintained the expectation that economic activity would “remain weak for a time,” and noted substantial resource slack would likely continue to dampen cost pressures and longer-term inflation expectations remain contained.
The Dow Jones Industrial Average gained 30 points (0.3%) to close at 9,802, the S&P 500 Index rose 1 point (0.1%) to 1,047, while the Nasdaq Composite declined 2 points (0.1%) to 2,056. In moderate volume, 1.3 billion shares were traded on the NYSE and 2.2 billion shares were traded on the Nasdaq. Crude oil was $0.80 higher at $80.40 per barrel, and the Bloomberg gold spot price rose $7.40 to $1,091.80 per ounce. Elsewhere, the Dollar Index—a comparison of the US dollar to six major world currencies—fell 0.5% to 75.76.
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