US stocks mixed after Fed keeps interest rates low

Traders work on the floor of the New York Stock Exchange (NYSE) on July 14, 2014 in New York City (AFP Photo/Spencer Platt)

New York (AFP) - Wall Street stocks Wednesday 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 percent) to 16,880.36, while the tech-rich Nasdaq Composite Index gained 20.20 (0.45 percent) to 4,462.90.

The broad-based S&P 500 essentially split the difference, rising a mere 0.12 (0.01 percent) 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 percent), Dow component JPMorgan Chase (+0.5 percent) and Wells Fargo (+1.1 percent).

Bank of America gained 1.6 percent even as a US judge ordered it to pay a $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 $312 million in the three months that ended June 30, with the number of monthly active users hitting 271 million, up 24 percent year-over-year.

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

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

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

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