US stocks indexes close mostly higher

Associated Press

The major U.S. stock indexes finished mostly higher Wednesday, with small companies notching big gains as lawmakers in the House and Senate reached a deal on a sweeping tax reform package.

The Dow Jones industrial average eked out its third record-high close in as many days, driven by a jump in Caterpillar. But a last-minute pullback in bank stocks left the Standard & Poor’s 500 index slightly lower.

Packaged food and beverage stocks, health care companies and industrials shares accounted for much of the market’s modest gains. Banks struggled as long-term bond yields edged lower, which makes it tougher for banks to earn money from lending.

The decline in financial stocks came even as the Federal Reserve raised its benchmark rate for the third time this year. The move, which was widely expected, came as the central bank noted that the U.S. economy was on sound footing.

“Widely expected. No big surprises. No big changes,” said Tim Dreiling, regional investment director at U.S. Bank Wealth Management. “It’s encouraging that they continue to see economic growth continuing into 2018, which aligns with our thinking.”

Trading got off to a subdued start Wednesday as investors waited for the afternoon policy update from the Fed.

As expected, the central bank raised the federal funds rate – what banks charge each other for short-term loans – by 0.25 percentage points to a still-low range of 1.25 to 1.5 percent.