Wednesday's Market Close: Stocks Buoyed By Fed Rate Cut, Fiat Chrysler-Peugeot Merger

The Federal Reserve’s decision Wednesday to cut interest rates by a quarter point and indications any hike is way in the future boosted trader confidence, sending markets higher at the close.

The Dow Jones Industrial Average, which spent much of the day hovering around the flat line, closed 115 points higher at 27,186. The S&P 500 added nearly 10 points to close at a record high 3046 while the Nasdaq gained 27 points to close at 8,303.

Volume on the New York Stock Exchange totaled 3 billion shares with 1,492 issues advancing, 141 setting new highs, and 1,469 declining, 38 setting new lows.

General Electric (GE), which gained 11% on its third-quarter earnings, Advanced Micro Devices (AMD) and PG&E (PCG), which rose 22% on news one of California’s massive wildfires was nearly contained, led the most actives.

Fed Chairman Jerome Powell told a news conference after the interest rate announcement economic data made the cut necessary to maintain moderate growth. A statement issued announcing the 25-basis-point cut in the federal funds rate to a target 1.5% to 1.75% range indicated the action would be the last for a while.

“The committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path,” the Fed statement said. Powell said an interest rate hike is not likely until there’s a significant increase in inflation, which has been running below the Fed’s 2% annual target.

President Trump was silent on the announcement although he had been pushing for a cut into negative territory and had berated the Fed as derelict in its duty for not following the lead of Japan and other countries that have plunged their rates below zero.

Elsewhere, the timing of the finalization of the first phase of a U.S.-China trade deal was thrown into disarray after Chile canceled the Asia-Pacific Economic Cooperation summit that had been scheduled for Nov. 16-17 due to civil unrest.

Trump had been planning to sign an agreement with Chinese President Xi Jinping at the summit and there was no immediate word on whether alternative arrangements would be made.

Fiat Chrysler Automobiles (FCAU) and Peugeot (UG.PA) agreed to a merger to form the world’s fourth-largest automaker. Peugeot approved the merger Wednesday while Fiat Chrysler’s board was set to meet later in the day. The merger would put Fiat Chrysler Chairman John Elkann at the helm while Peugeot CEO Carlos Tavares would become CEO. The news sent Fiat Chrysler’s shares up more than 6% and Peugeot’s up 4%.

Global markets were mostly lower.

In Asia, Hong Kong’s Hang Seng closed off 0.44% while Japan’s Nikkei 225 was off 0.57% and the Chinese Shanghai Composite lost 0.5%. Australia’s S&P/ASX dipped 0.83%.

In Europe, the London FTSE closed up 0.29% while the German DAX dipped 0.31% and the French CAC 40 added 0.23%. The Stoxx Europe 600 slipped 0.02%.

The British Pound was up 0.05% to $1.2874 while the euro added 0.13% to $1.1125. The U.S. dollar index was off 0.01%.

Oil futures were lower. Crude oil was off 1.62% at $54.63 a barrel while Brent dipped 1.06% to $60.58. Gold and silver futures were higher.

The 10-year U.S. Treasury note