Dow drops more than 100 points amid Fed announcement

NEW YORK, March 20 (Xinhua) -- U.S. stocks closed mixed after volatile trading on Wednesday with the Dow posting triple-digit losses amid the Federal Reserve's latest monetary policy announcement.

The U.S. Federal Reserve announced to leave interest rates unchanged after concluding a two-day policy meeting Wednesday afternoon. The move met market expectations and reflected the central bank's patient approach regarding monetary policy changes.

In support of the goals of fostering maximum employment and price stability, the Federal Open Market Committee (FOMC) decided to maintain the target range for the Federal funds rate at 2.25 percent to 2.5 percent, the central bank said in a statement.

"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the Federal funds rate may be appropriate to support these outcomes," it said.

The Fed also indicated no more hikes will be coming this year.

The U.S. equities traded on a downbeat note since Wednesday's opening. The markets pared their early losses and turned positive shortly after the announcement as traders cheered the Fed's more accommodative policy stance.

"The U.S. central bank said today that the policy of not raising interest rates will continue. This decision will help corporations continue to buy back shares of their own companies. That is positive for stocks," John Monaco, a trader at Wellington Shields Co. LLC, told Xinhua.

However, not all major indexes managed to secure their gains at the close as the Fed's announcement also dragged down Treasury yields, pushing bank shares lower.

Bank stocks fell broadly along with rates, with the SP 500 financials sector down more than 2 percent, weighing on the market.

At Wednesday's close, the Dow Jones Industrial Average slid 141.71 points, or 0.55 percent, to 25,745.67. The SP 500 was down 8.34 points, or 0.29 percent, to 2,824.23. The Nasdaq Composite Index was up 5.02 points, or 0.07 percent, to 7,728.97.

The markets have been rattled throughout last year amid fears of rapid interest rate hikes.

Rising interest rates can be a hurdle to smaller companies that carry a high proportion of debt, so any sign that the Fed plans to continue to raise rates each quarter could weigh on corporate sentiment.

"Interest rates have traditionally been a huge factor in the market," Peter Tuchman, a stock trader on the floor of the New York Stock Exchange, told Xinhua.

"They've done the work they needed to do, and at this point we need to put a little pause on it and let the economy catch up to the rising interest rate," he noted.

U.S. stocks have posted solid gains this year with the three major indexes up at least 10 percent so far, in large part because the Fed said in January it would be "patient" in raising rates. Enditem