Market Summary

Stocks were green across the major averages on Wednesday until the fed statement at 2:15 outlined the central bank’s plan to remove emergency support from the economy next year. The blue chips were the only average unable to stay green at the close, as the Dow Jones industrials fell 10.88, or 0.1 percent, to 10,441.12. The broader Standard & Poor’s 500 index rose 1.25, or 0.1 percent, 1,109.18, while the Nasdaq composite index rose 5.86, or 0.3 percent, to 2,206.91

Oil futures soared $2.74 to $73.43 a barrel on the NYMEX following new data showing a bigger weekly drawdown in U.S. crude reserves than expected. Gold futures rose $13 to $1,135.50 per ounce as the dollar index fell 0.2%.

FOMC Decision

The fed reiterated its commitment to keep rates exceptionally low for an extended period of time at the conclusion of their two day meeting. At the current target rate, the prime rate stands around 3.25%. It is all well and dandy that rates are low, but if most small businesses cant access those funds, then what is the point?

The Fed in on track to buy a total of $1.25 trillion in mortgage securities from Fannie Mae and Freddie Mac by the end of March. It has bought $845 billion so far. It’s also on pace to buy $175 billion in debt from those groups under the same deadline. So far, the Fed has bought nearly $156 billion.

The committee noted that consumer spending remains sluggish, the job market weak, wage growth slight and credit tight. But we are growing, albeit slowly.

Too Much Slack for Inflation Threat

Consumer prices rose in line with expectations in November on a surge in energy costs, but prices were flat excluding food and energy, a government report showed on Wednesday.

The Labor Department said its Consumer Price Index leaped 0.4 percent on a seasonally adjusted basis after an unrevised 0.3 percent gain in October. A 4.1 percent burst in the energy index led the rise as gasoline, electricity, fuel oil, and natural gas prices rose.

Prices rose 1.8 percent over the last 12 months, as expected, the first year-over-year gain since February. Core prices rose 1.7 percent over the 12-month period.

New Home Sales Jump in November

The Commerce Department says construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country although the increase was slightly lower than economists had expected. Applications for new building permits were also up, rising 6 percent to an annual rate of 584,000 units, a stronger showing than economists predicted.