US STOCKS-Wall St posts modest gain as Fed signals rates to hold for some time

(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window.)
* Fed expects moderate economic growth next year
* Focus on U.S.-China trade ahead of Dec. 15 deadline
* Home Depot, American Eagle drop after forecasts
* Indexes up: Dow 0.11%, S&P 500 0.29%, Nasdaq 0.44%

(Updates with close of U.S. market)
By Lewis Krauskopf
Dec 11 (Reuters) - Wall Street's main stock indexes ended
modestly higher on Wednesday after the U.S. Federal Reserve held
interest rates steady and signaled that borrowing costs are
likely to remain unchanged indefinitely.
The U.S. central bank said moderate economic growth and low
unemployment are expected to continue through next year's
presidential election. After cutting rates three times earlier this year, the Fed
left its benchmark rate at the target range of between 1.50% and
1.75%, a decision that was widely expected.
"You are looking at a cautiously optimistic Fed," said Karl
Schamotta, chief market strategist at Cambridge Global Payments
in Toronto. "The tone that you see through the statement and
projections suggest that they believe that they have taken out
enough insurance to prevent a downturn."
The Fed's move to ease monetary policy this year has
supported the rise in stocks to record highs; the S&P 500 has
gained 25% so far in 2019.
With the Fed expected to stand pat on rates this time,
investors have been more focused on U.S.-China trade relations,
including new tariffs on Chinese goods. President Donald Trump
has said the new tariffs will go into effect on Dec. 15, but
uncertainty remains over whether they will be implemented.
"There was really nothing to take away from the narrative
which has taken the stock market higher, which is the Fed has
lowered rates three times this year. So we are in a pretty good
interest rate environment to hopefully help the growth rate,"
said James Ragan, director of wealth management research at D.A.
Davidson in Seattle. "The focus will be back on trade here after
today."
Fed policymakers said they would continue monitoring "global
developments" in deciding whether interest rates need to change.
They also said they would keep an eye on "muted inflation
pressures," a reflection of concern that the pace of price
increases has failed to hit the central bank's target.
Data on Wednesday did show U.S. consumer prices increased
solidly in November. The Dow Jones Industrial Average .DJI rose 29.37 points,
or 0.11%, to 27,911.09, the S&P 500 .SPX gained 9.1 points, or
0.29%, to 3,141.62, and the Nasdaq Composite .IXIC added 37.87
points, or 0.44%, to 8,654.05.
Most S&P 500 sectors finished positive, with materials
.SPLRCM and technology .SPLRCT leading the way.
In company news, Home Depot Inc HD.N shares fell 1.8% as
the home improvement chain forecast fiscal 2020 sales below Wall
Street expectations. Home Depot shares were the biggest drag on
the Dow, keeping the blue chip index's gain relatively slim.
American Eagle Outfitters Inc AEO.N shares dropped 6.5%
after the apparel retailer forecast holiday-quarter profit and
comparable sales below market expectations. Advancing issues outnumbered declining ones on the NYSE by a
1.88-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and one new low; the
Nasdaq Composite recorded 97 new highs and 58 new lows.
About 6.3 billion shares changed hands in U.S. exchanges,
below the 6.7 billion daily average over the last 20 sessions.