Benchmarks finished its choppy session on a mixed note yesterday
after Fed minutes showed officials debated about the timing of rate
hike. S&P 500 and Dow finished in the green for the third
straight day after they were able to pare losses following jitters
from the Fed minutes. However, Nasdaq snapped its five-session
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Ahead of Wall Street
The S&P 500 is now 5 points away from its record high. The
S&P 500 and the Dow gained for three-straight days. The Nasdaq
snapped a five-session winning streak and settled in the red.
The Dow Jones Industrial Average (DJI) gained almost 0.4% to close
at 16,979.13. The Standard & Poor 500 (S&P 500) advanced
almost 0.3% to settle at 1,986.51. The tech-laden Nasdaq Composite
Index closed at 4,526.48; declining a meager 0.02%. The fear-gauge
CBOE Volatility Index (VIX) dropped 3.5% to settle at 11.78. A
total of 4.5 billion shares were traded on Wednesday, less than
last five day's average of 5.2 billion. Advancers outpaced
declining stocks on the NYSE. For 49% stocks that advanced, 47%
Benchmarks slipped once the Fed minutes were released at 2 p.m.
Minutes from the Federal Reserve's July 29-30 policy meeting
revealed Fed officials debated whether they need to hike key
interest rates sooner-than-expected on the backdrop of an improving
The Fed minutes showed some Fed officials were in favor of
tightening monetary policy. They debated the timing of a rate hike
following a recovery in the job market and pickup in inflation. The
minutes also stated that "some" policymakers said "actual and
expected progress" toward 5.5% unemployment and 2% annual inflation
rate are "sufficient to call for a relatively prompt move" towards
increasing interest rates.
However, there were other Fed officials who contradicted these
views and sought further indications before deciding on hiking
federal funds rate. At the end of the meeting, "most" of the policy
makers agreed that timing of a hike "would depend on further
information on the trajectories of economic activity, the labor
market and inflation."
Meanwhile, investors waited for what Janet Yellen and Mario Draghi
have to say at Jackson Hole, Wyo on Friday. Federal Reserve
Chairwoman Janet Yellen's speech will possibly indicate whether the
quantitative easing program will continue. European Central Bank
President Mario Draghi's speech will provide clues as to whether
ECB will push for easy monetary policy in order to combat the
perils of deflation.
Shares of The Home Depot, Inc. (
) gained 2.9% and closed at a record high of $90.75 a day after the
company reported strong earnings results. Home Depot turned out to
be the biggest percentage gainer among the Dow components.
Lowe's Companies Inc. (
) closed with gains of 1.6% after hitting an intra-day record high
of $52.65. The company's second-quarter earnings of $1.04 per share
were a couple of cents ahead of the Zacks Consensus Estimate.
Target Corp. (
) reported second-quarter adjusted earnings of 78 cents a share, in
line with the Zacks Consensus Estimate. Shares of the discount
retailer increased 1.8%.
Shares of American Eagle Outfitters, Inc. (
) surged almost 12% after the company posted second-quarter 2014
earnings per share of 2 cents. The Zacks Consensus Estimate
expected it to be break even. The Consumer Discretionary Select
Sector SPDR (XLY) advanced 0.5%, the second-highest among the
S&P 500 sectors.
Seven out of 10 sectors of the S&P 500 ended in the green. The
Industrial Select Sector SPDR (XLI) gained almost 1.1%, the highest
among the S&P 500 sectors. Key stocks from the sector such as
General Electric Company (
), United Technologies Corp. (
), Union Pacific Corporation (
), 3M Company (
) and Honeywell International Inc. (
) increased 1.2%, 1.1%, 1.1%, 0.8% and 1.1%, respectively.
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