STOCKS FALL, RALLY, THEN FALL AGAIN AFTER THE FED: Here's what you need to know

The Federal Reserve's September meeting is finally behind us, and we did not get an interest rate hike.

After a quiet morning session, things got really volatile in the stock market. The major indexes spiked when we got the Fed's statement, with the Dow rising nearly 200 points. But stocks quickly gave up those gains.

The dollar fell to a three-week low, and treasuries rallied.

First, the scoreboard:

• Dow: 16,675.01, -64.94, (-0.39%)
• S&P 500: 1,990.19, -5.12, (-0.26%)
• Nasdaq: 4,893.95, +4.71, (0.10%)

And now, the top stories on Thursday:

1. The Fed's benchmark rate remains at 0%-0.25%, where it's been since December 2008. In its statement, the FOMC repeated that it will only be appropriate to raise rates after there's "some further improvement" in the labor market, with confidence that inflation will reach its 2% target. The Fed also expressed renewed concern about "developments abroad." The most recent beige book, with anecdotes about the economic outlook, had more mentions of China than any issue in at least the last three years.
2. The Fed raised its expectation for 2015 gross domestic product, and now expects growth between 2% and 2.3% from the previous forecast of 1.8%-2%. It also lowered its unemployment rate forecast to between 5% and 5.1% from 5.2% - 5.3%. Its forecast for personal consumption expenditures inflation was lowered to 0.3%-0.5% from 0.6%-0.8%. One member projected negative rates at the end of 2015 and 2016.
3. The "Dot Plot" got more dovish. The graphic of FOMC members' expectations for interest rates showed that the median member expects rates to stay between 0.25% and 0.5% at the end of 2015, down from 0.5%-0.75%.
4. Expectations for a hike were low going into the announcement, with fed fund futures reflecting just a 30% probability for a September raise. However, earlier this week, the 2-year treasury note yield - which moves in tandem with interest rate expectations - rallied to a four-year high. It tumbled today to a three-week low of around 0.69%. The US dollar index also fell to a three week low, to 94.48.
5. In economic data, initial jobless claims fell 11,000 to 264,000 last week, the lowest level in two months. It was the survey week for the September jobs report, and marked six months of claims below 300,000.
6. The Philadelphia Fed manufacturing index plunged to -6 from 8.3 in the prior month. It was the lowest reading since February 2014. However, indicators for new orders, shipments, and employment stayed positive. Finally, housing starts fell 3% in August, less than expected, at an annualized pace of 1.126 million. Building permits totaled 1.17 million.

DON'T MISS: One new phrase jumped out in the Fed's statement »

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