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US stocks mixed after Fed keeps interest rates low

Wall Street stocks on Wednesday (July 30) finished mixed after the US Federal Reserve kept interest rates near zero and government data showed surprisingly strong second-quarter US economic growth.

NEW YORK: Wall Street stocks on Wednesday (July 30) finished mixed after the US Federal Reserve kept interest rates near zero and government data showed surprisingly strong second-quarter US economic growth.

The Dow Jones Industrial Average fell 31.75 points (0.19 per cent) to 16,880.36, while the tech-rich Nasdaq Composite Index gained 20.20 points (0.45 per cent) to 4,462.90.

The broad-based S&P 500 essentially split the difference, rising a mere 0.12 points (0.01 per cent) to 1,970.07.

Stocks opened higher after the Commerce Department reported that second-quarter growth was 4.0 percent and trimmed the size of the first-quarter contraction.

But the Dow and S&P 500 tilted into negative territory at mid-morning before rallying somewhat after the Fed interest-rate decision at 1800 GMT.

Banking stocks rose, including Citigroup (+1.2 per cent), Dow component JPMorgan Chase (+0.5 per cent) and Wells Fargo (+1.1 per cent).

Bank of America gained 1.6 per cent even as a US judge ordered it to pay a US$1.3 billion penalty in a mortgage fraud case. The penalty comes after a New York jury in October 2013 found that Bank of America sold bad loans to mortgage-finance firms Fannie Mae and Freddie Mac in 2007.

Twitter bolted 20 percent higher after revenues more than doubled from a year ago to US$312 million in the three months that ended June 30, with the number of monthly active users hitting 271 million, up 24 per cent year-over-year.

Online shop and hotel listing service Yelp rose 8.8 per cent after reporting second-quarter earnings of US$2.7 million compared with a loss of US$878,000 in the year-ago period.

Goodyear Tire & Rubber fell 8.0 per cent as second-quarter earnings of 80 cents per share beat expectations by a penny but revenues came in at US$4.7 billion, below the US$4.75 billion projected by analysts.

Biotechnology company Amgen rose 5.4 per cent as it announced it will cut between 2,400 and 2,900 jobs, mostly in the US. Earnings for the second quarter rose 23 per cent to US$1.5 billion.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.55 per cent from 2.46 per cent on Tuesday, while the 30-year advanced to 3.31 per cent from 3.22 per cent. Bond prices and yields move inversely.

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