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Nobody expected the Federal Reserve to raise short-term interest rates Wednesday – and it did not. About 74% of economists surveyed by The Wall Street Journal said the Fed’s next interest-rate increase would come in December - and it might.

Between now and December, anything could happen but given the Fed’s reticence to raise rates so far, chances are the 74% are spot on.


Setting Lower Expectations

Another result of this week’s meeting was hinted at by Fed chair Janet Yellen who said, "Our decision does not reflect a lack of confidence in the economy. It's better to err on the side of caution."

As the result of that caution the Fed downgraded its forecast for economic growth for 2016 for the third time this year. Growth is now projected to be 1.8% versus the 2% growth forecast in June. Of 17 Fed members, 10 predict there will be only one rate hike the rest of this year.

Stocks Rally

Caution, it turns out, plays well in the market with stocks showing a rally following the Fed decision to hold off on a rate hike for now. Dow Jones closed 160 points higher and the S&P 500 gained 1.1%.

Leading the charge on the DJIA was the Boeing Co. (NYSE:BAB), which rose 2.17% on volume of 3.2 million shares.

Newmont Mining Corp. (NYSE:NEMC) over on the S&P 500 was up 7.55% on volume of more than 11 million shares.

Oil Jumps As Stockpiles Shrink

Oil prices rose as fuel reserves dropped giving investors some hope, at least that supply gluts were easing off. According to the Energy Information Administration, oil inventories dropped by 6.2 million barrels and gasoline inventories decreased by 2.5 million barrels last week.

Overall, benchmark U.S. crude rose 2.9% to $45.34 a barrel. Brent crude, on the international side, rose 2.1% to $46.83 per barrel.

As a result, Anadarko Petroleum Corp. (NYSE:APCC) shares rose 4.8% to $61.06 and Chevron Corp. (NYSE:CVXC) was up 2% to $99.63.

Good News For Some

Adobe Systems Inc. (NASDAQ:ADBEC) showed a 7.1% gain to $107.78 following optimistic forecasts for the year and solid Q3 results.

Likewise, FedEx Corp. (NYSE:FDXC), which also boosted forecasts and projected a record upcoming holiday season saw its stock rise 6.9% to $173.86.


Bad News For Others

Student loan management company, Navient Corp. (TSX:NAVIC) fell 3.7% to $13.28 on news federal regulators were investigating shareholder, Leon Cooperman for insider trading. Cooperman has denied the charges.

Skechers USA Inc. (NYSE:SKXC) dropped 9% following a downgrade from analysts at Morgan Stanley. Analysts said they believed the company would face a short-term disruption from changing trends in the athletic footwear industry.

Morgan Stanley cut its price target 40% to $25 per share, which is still above Skechers current price of about $21 per share.

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