Stocks jump after Fed indicates patience on rates

NEW YORK — Stocks powered higher Wednesday after the Federal Reserve signaled it could hold off on interest rate increases in the coming months, citing muted inflation.

The Fed's announcement allays one of the biggest concerns for investors: That the economy, and corporate profits, could be hurt if the Fed continued to steadily increase interest rates after raising them four times last year.

"The Fed gave the market everything it wanted in terms of a dovish message," said Willie Delwiche, investment strategist at Baird. "Now it's saying maybe there will be rate hikes, maybe there won't be."

Technology companies drove the broad rally, which snapped the market's two-day losing streak. The benchmark S&P 500 index is now track to end January with its biggest monthly gain in more than three years, and the gains pushed the Dow Jones Industrial Average above 25,000 points for the first time since early December.

The central bank said Wednesday that it plans to be "patient" about future rate hikes. Its benchmark short-term rate will remain in a range of 2.25 percent to 2.5 percent after having been raised four times last year. The Fed's key rate influences many loan rates for businesses and consumers, including mortgages.

"The situation calls for patience," chairman Jerome Powell said. "We have the luxury to be patient."

Pending home sales fell in Dec.

WASHINGTON — Fewer Americans signed contracts to buy homes in December with affordability pressures causing interest from would-be buyers to fall.

The National Association of Realtors says its pending home sales index fell 2.2 percent last month to 99, its lowest reading since April 2014. The index based on contract signings has plunged 9.8 percent over the past 12 months.

The index fell in the Northeast, Midwest and South in December. But contract signings increased in the West region, which is among the priciest in the country and has witnessed a severe decline in sales over the past year as a result.

Pending sales are a barometer of home purchases that are completed a month or two later.

Bitter cold slows railroad traffic

OMAHA, Neb. — Railroads work to continue moving freight regardless of the weather, but this week's extreme cold is slowing traffic and forcing them to use shorter trains.

BNSF spokeswoman Amy Casas says that in subzero cold, the air brakes trains use become less effective because air flow is reduced. So railroads have to reduce the length of trains.

Chicago is a key hub where all major North American freight railroads meet and hand off traffic. With the extreme cold, freight railroads divert traffic away from the area when possible, and Amtrak cancelled all of its departures from Chicago on Wednesday.

Union Pacific spokeswoman Raquel Espinoza said shipments to Minnesota, Wisconsin, Illinois and Iowa are being delayed by between 48 hours and 72 hours. The cold also takes a toll on rail and switches. Railroads use thousands of switch heaters to help ensure that the crucial devices will work.

Subscriber numbers falling at AT&T

NEW YORK — Wireless and entertainment giant AT&T Inc. on Wednesday reported big subscriber declines in its TV division — even in its much-lauded DirecTV Now streaming service.

AT&T has spent billions in recent years to enter the entertainment business, buying satellite TV company DirecTV and then Time Warner, owner of HBO, CNN and the Warner Bros. movie studio.

Its video division is taking some lumps, however. In the fourth quarter, it added to its string of satellite-TV customer losses with 403,000 defections, worse than expected. DirecTV Now, the online service pitched as a cable replacement, shed 267,000 customers, the first drop since it launched in November 2016.

AT&T has been rolling back big discounts for DirecTV Now. It had 500,000 customers paying only $10 a month for the service, which hurts its profitability. Many of those customers are leaving as promotions end. In a more positive sign, the number of customers paying full price for the service grew, AT&T CEO Randall Stephenson said. DirecTV Now starts at $40 a month. It has 1.6 million streaming customers.

In its wireless division, the second-largest in the country after Verizon, AT&T added 134,000 cellphone customers who pay a monthly bill. Those are more lucrative than "prepaid" cellphone customers. But analysts expected more, and "churn," or the percentage of customers who leave, rose.

Overall, the company posted net income of $4.86 billion on revenue of $47.99 billion in the period, which fell short of Wall Street forecasts of $48.43 billion. For the year, the company reported profit of $19.37 billion on revenue of $170.76 billion.

McDonald's logs strong global growth

CHICAGO  — McDonald's reported strong global growth in sales at established locations and it topped expectations for both profit and revenue.

The world's biggest hamburger chain on Wednesday reported fourth-quarter earnings of $1.42 billion, or $1.82 per share. Adjusted for one-time gains and costs, came to $1.97 per share, which is 7 cents better than industry analysts had expected, according to a poll by Zacks Investment Research.

Revenue was $5.16 billion, matching forecasts.

McDonald's had global sales growth of 4.4 percent at locations open at least one year.

Survey: Jan. job growth strong

WASHINGTON — U.S. businesses added a solid 213,000 jobs in January, a private survey found, a sign the partial government shutdown and trade war concerns aren't discouraging companies from hiring more people.

Payroll processor ADP said Wednesday that job gains fell in January from a robust 263,000 in December, which was revised slightly lower.

ADP's report does not include government employees and therefore was not directly affected by the government shutdown. Instead, the data suggests that the shutdown did not broadly discourage private companies from adding workers. Still, the ADP report frequently diverges from the official figures.

The report was released two days before the government issues its official monthly jobs numbers Friday. Economists are forecasting a smaller gain of 164,000, though that is enough to lower the unemployment rate over time.

Toyota, Nissan sales short of VW's

TOKYO — Toyota Motor Corp. sold 10.59 million vehicles globally last year, fewer than the 10.83 million delivered by German rival Volkswagen AG, the Japanese automaker said Wednesday.

Separately, the Nissan-Renault-Mitsubishi alliance reported that its combined global sales stood at 10.76 million vehicles, up 1.4 percent from the previous year.

Nissan Motor Co.'s global sales totaled 5.65 million vehicles last year, while Renault SA of France, which owns 43 percent of Nissan, recorded global sales of 3.9 million vehicles. Nissan owns 34 percent of smaller Japanese rival Mitsubishi Motors Corp., which sold 1.2 million vehicles last year.

The numbers released Wednesday underscore intense competition among the automakers.

Toyota's vehicle sales last year rose 2 percent from 2017; while Nissan's fell nearly 3 percent. Mitsubishi's jumped 18 percent year-on-year, and Renault's sales climbed 3 percent.

Nasdaq bids on exchange in Oslo

COPENHAGEN, Denmark — Nasdaq has made an offer to acquire the Oslo stock exchange, the last trading place in the Nordic-Baltic region it doesn't own.

Bente  Landsnes, head of Oslo Boers, recommended Wednesday that shareholders accept the offer and decline a rival bid by Euronext, saying it was "the best alternative for all stakeholders."

Nasdaq Nordic chairman Lauri Rosendahl said the plan was not to turn the region into one market but maintain eight separate stock exchanges.

Nasdaq Nordic, which is behind the stock exchanges in Sweden, Denmark, Finland, Iceland and the three Baltic countries, offered $17.88 in cash per share. That values the company at $769 million.

Founded in 1819, the Oslo Boers has 220 companies listed.

Wire reports