US close: Stocks higher despite more hawkish Fed minutes
Dow Jones +0.35%
Nasdaq -0.03%
S&P 500 +0.27%
US stocks on average finished in positive territory on Wednesday despite minutes from the Federal Reserve's latest policy meeting showing an interest rate may come sooner than expected, although it is not likely to be until February or March next year.
The Dow Jones Industrial Average and Standard & Poors 500 indices were both firmly in positive territory, while the more tech-focused Nasdaq was slightly below flat.
The release of minutes from the Federal Open Market Committee July meeting showed the governors were becoming increasingly divided over policy, with a growing minority calling for a "relatively prompt" interest rate hike.
In July, the Fed announced it would cut a further $10bn off monthly bond purchases and maintain interest rates at 0.25%, with a 9-1 vote in favour from Philadelphia Fed President Charles Plosser being the only dissenter. The US central bank has indicated that it sees no immediate need to lift rates, saying that the labour market still has room to grow.
But the minutes showed that some members believe that recent strengthening of the economy, notably on the jobs and inflation fronts, was already "sufficient to call for a relatively prompt move toward reducing policy accommodation" in order to avoid overshooting the committee's unemployment and inflation goals.
"These participants were increasingly uncomfortable with the Committee's forward guidance," the minutes said.
However, most governors agreed more data was needed to move up the schedule of rate hikes after the second quarter growth drop in GDP "increased uncertainty", with several members expecting inflation to move back towards the committee's target "very slowly" and pointing to the high rates of long-term unemployed.
Economist Paul Dales at Capital Economics said the minutes suggestd the Fed has taken "another step closer towards raising interest rates".
He concluded: "Overall, a lot still depends on whether or not wage growth accelerates as the labour market continues to improve. Nonetheless, the minutes provide some support to our view that rates will first rise in March and will then increase by more than widely expected."
In corporate news, Apple declined after reaching a record close on Tuesday evening. The stock finished at $100.53, ahead of the previous closing record set in September 2012, on the back of optimism surrounding the gadget giant's upcoming new products.
Car rental group Hertz shares bombed after the company said it expected to be "well below the low end" of guidance. Shares rallied somewhat when just prior to close, activist investor Carl Icahn said he sought discussions with Hertz management after taking a more than 8% stake in the company.
Home-improvement retailer Lowe's was in the red despite beating analysts' forecasts with its second-quarter profits, as the company cut its revenue guidance for the full year.
Just before the market closed, news filtered through that four McDonald's restaurants had been closed in Russia, with more under investigation, due to "sanitation concerns".
West Texas Intermediate futures rose 0.57% to $93.39 per barrel, according to the ICE.
The 10-year yield climbed two basis points to 2.42%.
S&P 500 - Risers
F5 Networks Inc. (FFIV) $122.57 +5.15%
Mylan Inc. (MYL) $48.59 +3.30%
Jacobs Engineering Group Inc. (JEC) $53.90 +3.14%
Home Depot Inc. (HD) $90.75 +2.86%
Micron Technology Inc. (MU) $33.30 +2.78%
Adt Corp (ADT) $37.22 +2.70%
Southwest Airlines Co. (LUV) $31.57 +2.67%
Sandisk Corp. (SNDK) $97.68 +2.50%
Delta Airlines Inc. (DAL) $40.52 +2.48%
Electronic Arts Inc. (EA) $37.56 +2.41%
S&P 500 - Fallers
Staples Inc. (SPLS) $11.32 -2.58%
Transocean Ltd. (RIG) $38.72 -2.05%
Whole Foods Market Inc. (WFM) $38.19 -1.47%
Red Hat Inc. (RHT) $61.68 -1.38%
Southwestern Energy Co. (SWN) $39.44 -1.33%
Coca-Cola Enterprises Inc. (CCE) $47.69 -1.32%
Ball Corp (BLL) $63.24 -1.30%
Intuitive Surgical Inc. (ISRG) $467.50 -1.20%
Nabors Industries Ltd. (NBR) $25.82 -1.07%
MeadWestvaco Corp. (MWV) $42.44 -1.07%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $90.75 +2.86%
Boeing Co. (BA) $127.35 +1.41%
General Electric Co. (GE) $26.36 +1.19%
United Technologies Corp. (UTX) $109.71 +1.06%
Merck & Co. Inc. (MRK) $59.48 +0.97%
Visa Inc. (V) $216.20 +0.56%
Nike Inc. (NKE) $78.91 +0.51%
Intel Corp. (INTC) $34.50 +0.47%
American Express Co. (AXP) $88.49 +0.42%
Caterpillar Inc. (CAT) $107.70 +0.37%
Dow Jones I.A - Fallers
Microsoft Corp. (MSFT) $44.95 -0.84%
Walt Disney Co. (DIS) $89.84 -0.28%
McDonald's Corp. (MCD) $94.19 -0.28%
Pfizer Inc. (PFE) $28.89 -0.17%
Chevron Corp. (CVX) $127.49 -0.11%
E.I. du Pont de Nemours and Co. (DD) $66.22 -0.11%
Unitedhealth Group Inc. (UNH) $83.43 -0.05%
Coca-Cola Co. (KO) $41.25 -0.02%
Nasdaq 100 - Risers
F5 Networks Inc. (FFIV) $122.57 +5.15%
Mylan Inc. (MYL) $48.59 +3.30%
Micron Technology Inc. (MU) $33.30 +2.78%
Sandisk Corp. (SNDK) $97.68 +2.50%
Keurig Green Mountain Inc (GMCR) $117.58 +2.16%
Bed Bath & Beyond Inc. (BBBY) $63.72 +2.13%
Broadcom Corp. (BRCM) $38.91 +2.05%
Catamaran Corp (CTRX) $47.28 +2.01%
Garmin Ltd. (GRMN) $57.07 +1.91%
QUALCOMM Inc. (QCOM) $76.44 +1.74%
Nasdaq 100 - Fallers
Staples Inc. (SPLS) $11.32 -2.58%
Whole Foods Market Inc. (WFM) $38.19 -1.47%
Intuitive Surgical Inc. (ISRG) $467.50 -1.20%
Dish Network Corp. (DISH) $64.31 -1.12%
Charter Communications Inc. (CHTR) $155.77 -1.04%
Mattel Inc. (MAT) $34.90 -0.96%
Applied Materials Inc. (AMAT) $21.90 -0.90%
Alexion Pharmaceuticals Inc. (ALXN) $168.74 -0.88%
Yahoo! Inc. (YHOO) $37.50 -0.87%
Microsoft Corp. (MSFT) $44.95 -0.84%
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