The FOMC announced a quarter point interest rate hike but said the rate of increase would be very gradual. This was the first interest rate hike since June 2006. This was well received by the markets, as SPX rose $30 to close at $2073. RUT lagged a bit, as usual this year, closing up $17 at $1149. Trading volume was pretty flat with 2.7 billion shares of the S&P 500 trading. Trading volume rose 5% on the NYSE, but fell 8% on NASDAQ. Volatility continued to contract with the VIX dropping three points to 18%.
Housing starts came in at an annualized number of 1.173 million for November, up from last month's 1.062 million. Building permits reported at 1.289 million for November, up from 1.161 million. Industrial production declined 0.6% in November, down from -0.4%. Capacity utilization was roughly flat at 77.0% in November, as compared to October at 77.5%.
IBD moved from Market in Correction to Market in Confirmed Uptrend. This was a record turnaround for this indicator.
The FOMC announcement created a lot of discussion and debate. The Fed has sang the "dependent on the data" song for a long time, and now, with inflation reported at roughly zero, versus the Fed target of 2%, and employment looking tepid (labor force participation at record lows, etc.), the Fed triggers the rate hike. Maybe some politics going on here? Incumbents can point to the Fed saying the economy is fine.