Global Stocks Mixed As Fed Vows To Keep Interest Rates Low

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Global stocks were mixed Wednesday as the Federal Reserve kept interest rates low, while crude prices shot higher as a Gulf of Mexico hurricane dented production in the oil-producing region.

Wall Street equities finished mostly lower after a volatile session, with the tech-rich Nasdaq again weak after a string of records last month.

The Fed pledged to keep interest rates low until it has achieved its goal of maximum employment, with central bankers offering a somewhat better forecast for this year but a more modest outlook for 2021 and 2022.

Fed Chair Jerome Powell also stressed the need for more stimulus from Washington, noting 11 million people are still out of work due to the pandemic.

"My sense is that more fiscal support is likely to be needed," Powell said, noting that aid approved in March was an "essential" factor in the stronger-than-expected recovery so far.

Talks in Congress have stalled amid a partisan dispute, but there were signs Wednesday of possible movement, as the White House has balked at what officials say is the unrealistically high price tag demanded by opposition Democrats.

But US President Donald Trump on Twitter urged Republicans in Congress "go for the much higher numbers," without specifying what he meant.

Economic data released prior to the Fed announcement was mixed, with August retail sales rising less than expected, but a survey pointing to strong sentiment among American homebuilders.

Earlier, Frankfurt and Paris stock edged higher after the Organization for Economic Co-operation and Development (OECD) cautioned that the pandemic-induced global recession will not be as deep as expected due to countries' efforts to contain economic fallout from Covid-19.

"After the initial bounce-back in many activities following the easing of confinement measures, there are some signs from high-frequency indicators and business surveys that the pace of the global recovery has lost momentum since June, particularly in many advanced economies," the OECD said.

It pointed out, however, that "the economic outlook remains exceptionally uncertain, with the Covid-19 pandemic continuing to exert a substantial toll on economies and societies."

The British pound gained ground against the dollar, weighing on the FTSE 100 after Prime Minister Boris Johnson said he was confident Britain and the EU will avoid a cliff-edge "no deal" at the end of this year.

Oil prices made solid gains of more than four percent as Hurricane Sally prompted some petroleum producers in the Gulf of Mexico to curtain production.

Weekly petroleum data also showed a surprisingly big drop in crude stockpiles, suggesting stronger demand.

House Speaker Nancy Pelosi has made a fresh attempt to get Democrats and Republicans to hammer out a new stimulus package House Speaker Nancy Pelosi has made a fresh attempt to get Democrats and Republicans to hammer out a new stimulus package  GETTY IMAGES NORTH AMERICA / ALEX WONG

New York - Dow Jones: UP 0.1 percent at 28,032.38 (close)

New York - S&P 500: DOWN 0.5 percent at 3,385.49 (close)

New York - Nasdaq: DOWN 1.3 percent at 12,997.86 (close)

London - FTSE 100: DOWN 0.4 percent at 6,078.48 (close)

Frankfurt - DAX 30: UP 0.3 percent at 13,255.37 (close)

Paris - CAC 40: UP 0.1 percent at 5,074.42 (close)

EURO STOXX 50: UP 0.2 percent at 3,338.84 (close)

Tokyo - Nikkei 225: UP 0.1 percent at 23,475.53 (close)

Hong Kong - Hang Seng: FLAT at 24,725.63 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,283.92 (close)

Euro/dollar: DOWN at $1.1816 from $1.1847 at 2100 GMT

Pound/dollar: UP at $1.2967 from $1.2886

Euro/pound: UP at 91.10 pence from 90.61 pence

Dollar/yen: DOWN at 104.92 yen from 105.78 yen

West Texas Intermediate: UP 4.9 percent at $40.16 per barrel

Brent North Sea crude: UP 4.2 percent at $42.22 per barrel

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