* U.S. stocks last down slightly, but trade both sides of
* Dollar turns higher
* Short-term Treasury yields rise
(Updates to after Fed statement)
By Caroline Valetkevitch
NEW YORK, Dec 14 Yields on shorter-dated
Treasuries hit their highest in more than five years while the
dollar turned positive on Wednesday after the U.S. Federal
Reserve raised interest rates as expected and signaled a faster
pace of hikes in 2017.
U.S. stocks were down slightly after trading both sides of
unchanged in choppy action following the statement from the Fed,
which raised the target federal funds rate 25 basis points to
between 0.50 percent and 0.75 percent.
Central bank policymakers also shifted their outlook to one
of slightly faster growth, with President-elect Donald Trump
planning a simultaneous round of tax cuts and increased spending
"It was little more hawkish than the market was expecting
... bonds are selling off in response to this," said David Joy,
chief market strategist at Ameriprise Financial in Boston.
Yields on two-year Treasury notes rose to their
highest since August 2009, while three-year yields
hit their highest since May 2010 and five-year yields
rose to their highest since May 2011.
The dollar index, which measures the greenback
against a basket of six major currencies, was last up 0.6
percent at 101.73 .
In the stock market, the Dow Jones industrial average
fell 20.07 points, or 0.1 percent, to 19,891.14, the S&P 500
lost 6.89 points, or 0.303294 percent, to 2,264.83 and
the Nasdaq Composite dropped 22.88 points, or 0.42
percent, to 5,440.95.
MSCI's all-country world stock index was
down 0.6 percent, and the pan-European STOXX 600 share index
ended down 0.5 percent.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Chuck Mikolajczak in New York; Editing
by Robin Pomeroy and Nick Zieminski)