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Dow 20,000? Not today: Stocks sink after rate hike

Adam Shell
USA TODAY

The waiting game for Dow 20,000 continues — even after the Fed's Wednesday announcement of a rate hike — as the blue chip stock gauge failed to hit the market milestone after flirting with history in the previous trading session.

Stocks treaded water till the Fed's announcement of a quarter-point hike, which came two hours before the 4 p.m. ET market close. The major indexes seesawed, climbing and then losing steam.

The Dow slid 0.6% -- down 119 points. It's about 207 shy of that never-reached 20,000 milestone.

Down by a larger amount was the S&P 500, which shed 0.8%. The Nasdaq composite lost 0.5%.

The Dow, arguably the world's best-known stock market barometer that's been around since 1896 and which is made up of 30 of America's best-known blue chip companies, climbed as high as 19,953.75 Tuesday before paring some gains and closing up 114.78 points to 19,911.21.

The chase for Dow 20,000: A monitor displays Tuesday's final numbers for the Dow Jones Industrial Average on the floor of the New York Stock Exchange on Dec. 13, 2016.  in New York City.  (Photo by Drew Angerer/Getty Images)

"The Dow hitting 20,000 has a lot of resonance with people because it's such a nice, big, round number," says Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners. "It's a nice mile marker and should boost investor confidence."

Dow nears 20,000: Is it 'rational' exuberance?

Recently, the Dow has been a recipient of the so-called "Trump Rally," a stock surge since Election Day powered by hopes that president-elect Donald Trump's more business-friendly, U.S.-focused policies will boost the economy and corporate earnings. Goldman Sachs, the Wall Street powerhouse bank, has been one of the biggest drivers of the Dow since Trump's election, as investors bet that lower regulations and higher interest rates will provide a major lift to the bank's profitability.

Will Trump's plan mean faster rate hikes?

Foreign stock markets were relatively quiet ahead of the Federal Reserve decision on interest rates. The broad Stoxx Europe 600 indes was down 0.3% and shares in Japan and Honk Kong closed relatively unchanged.

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