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Overnight Markets: Nasdaq gains after Fed decision on rates

Overnight Markets: Nasdaq gains after Fed decision on rates

The Nasdaq gained on Wednesday after the Federal Reserve gave a rosier assessment of the US economy while reaffirming that it is in no hurry to increase interest rates.

The Dow Jones industrial average declined 32 points, or 0.19%, to 16,880, the S&P 500 closed flat at 1,970, and the Nasdaq Composite added 20 points, or 0.45%, to 4,463.

US policy makers tapered monthly bond buying to $25 billion in their sixth consecutive $10-billion cut, staying on pace to end the purchase programme in October. Fed officials led by Chair Janet Yellen are stepping up a debate over when to raise interest rates for the first time since 2006 as unemployment falls faster than expected and inflation picks up toward their 2% goal.

Earlier Wednesday, government data showed gross domestic product grew at a 4% annualised rate in the second quarter, above the 3% rate that had been expected and a sharp reversal from the weather-impacted first quarter, when the economy contracted a revised 2.1%.

Separately, the ADP National Employment Report showed companies hired 218,000 workers in July, below analysts' projections of 230,000 and less than June's total.

Banking shares gained the most with Wells Fargo (WFC.N) rising 1.1%. Biotechnology stocks boosted the Nasdaq for a second straight day. Amgen Inc (AMGN.O) posted better-than-expected earnings and raised its outlook, sending its shares up 5.4%.

Among other big gainers, Twitter Inc (TWTR.N) surged 20%, its biggest ever one-day advance, after reporting that monthly active users rose a better-than-expected 24% in the second quarter.

Insurance stocks fell after Humana Inc (HUM.N), WellPoint Inc (WLP.N) and Aflac Inc (AFL.N) all reported lower earnings, though WellPoint's profit was above expectations.

Humana fell 5.6%, WellPoint lost 0.1% and Aflac slid 2.8%. UnitedHealth (UNH.N) lost 1.6% and was the biggest drag on the Dow.

After the bell, shares of Whole Foods Markets Inc (WFM.O) fell 5.4% after the company cut its 2014 forecasts for a fourth time. Akamai Technologies (AKAM.O) declined 5.9% following its results.

In Asia, shares were trading flat on Thursday in late morning session as the US economy grew faster than forecast and Fed comments on the jobs market added to the case for keeping interest rates low.

The MSCI Asia Pacific Index was little changed at 150 as of 10:48 a.m. in Hong Kong. Japan’s Topix index climbed 0.3% after the yen weakened by the most in four months yesterday. Singapore’s Straits Times Index rose 0.6% and Australia’s S&P/ASX 200 Index gained 0.2%. New Zealand’s NZX 50 Index added 0.1%. Hong Kong’s Hang Seng Index advanced 0.1%, while China’s Shanghai Composite Index was little changed. South Korea’s Kospi index slipped 0.3%. Taiwan’s Taiex index declined 1.2%.

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