US Market Indexes Gain With Conservative Central Bank Announcements

U.S. market indexes gained on Wednesday. For the day, the Dow Jones Industrial Average closed at 18293.70 for a gain of 163.74 points, or 0.90%. The S&P 500 was also higher, closing at 2163.12 for a gain of 23.36 points, or 1.09%. The Nasdaq Composite closed higher at 5295.18 for a gain of 53.83 points, or 1.03%. The VIX Volatility Index was lower at 13.28 for a loss of -2.64 points, or -16.58%.

In the Dow Jones Industrial Average, the following stocks led gains:

Boeing (BA, Financial) 2.17%

Caterpillar (CAT, Financial) 2.17%

Chevron (CVX, Financial) 1.98%

UnitedHealth (UNH, Financial) 1.77%

United Technologies (UTX, Financial) 1.72%

Microsoft (MSFT, Financial) 1.67%

The focus of the day’s trading was on the announcements from the Bank of Japan and the Federal Reserve. Both central banks held their September monetary policy meetings on Tuesday and Wednesday. The Bank of Japan’s policy meeting announcement was released Tuesday night at 11 p.m. EST. The Bank of Japan was conservative in its policy decision, keeping its central bank rate at -0.10% and its bond buying quantity unchanged at 80 trillion yen. It will, however, change its bond buying tactics to seek to stabilize its 10-year government bond yield at 0%.

The Federal Reserve released its central bank statement following the conclusion of its two-day meeting at 2 p.m. EST on Wednesday. The announcement from the Federal Open Market Committee said it would keep its central bank rate unchanged; also conservative considering the central bank last year was targeting four rate hikes in 2016. The Federal Reserve will also continue reinvesting in agency debt, agency mortgage-backed securities and Treasuries.

Stocks gained as global yields will likely remain low. Borrowing rates continuing at their current levels for businesses and consumers was also a positive factor for stocks.

In a CNBC report Wednesday, market specialists discussed the FOMC’s announcement and its affects on the market.

Disclosure: I do not own any stocks included in this article.

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