Stocks ended higher on Tuesday after the Federal Reserve raised short-term interest rates for the 10th time in more than a year and said that inflation remains contained.
The Dow Jones Industrial Average rose 78.74, or 0.8 percent, to 10,615.67 after three days of losses. The Standard & Poor’s 500 Index rose 8.25, or 0.7 percent, to 1,231.38. The Nasdaq Composite Index rose 9.80, or 0.5 percent, to 2,174.19.
The U.S. central bank’s policy-setting Federal Open Market Committee unanimously voted to lift the benchmark federal funds rate to a four-year high of 3.5 percent, as expected. The move pushed borrowing costs to their highest point in nearly four years to make sure the combination of high energy prices and a growing economy doesn’t turn into a recipe for inflation.
Investors also welcomed a drop in crude oil futures, which fell to $63.07 a barrel, down 87 cents, on the New York Mercantile Exchange.
Among local movers, shares of Southwest Water Co. rose 5.1 percent to $12.93 after the L.A.-based water production and distribution company beat estimates on its second-quarter adjusted net income and said that revenues rose 18 percent to $51.3 million. The company’s full-year revenue guidance also beat the average analyst estimate.
Molina Healthcare Inc. gained 3.9 percent to $25.05 after the Long Beach-based Medicaid health maintenance organization trumped earnings and revenue estimates with its second-quarter results, released late Monday.
And The DIRECTV Group Inc. edged up 2.1 percent to $16.39 after the El Segundo-based digital satellite company said late Monday that it doesn’t have to provide rival EchoStar Communications Corp. with competitive data for a patent-infringement lawsuit between TiVo Inc. and EchoStar. The Los Angeles judge denied EchoStar’s request that would have compelled DirecTV to provide profit margins from sales of digital video recorders as well as internal documents regarding DirecTV obtaining a license from TiVo. The requested information was neither relevant nor necessary for the lawsuit, the judge said.
