By Anora Mahmudova and Barbara Kollmeyer, MarketWatch FOMC
minutes reveal that Fed plans to hikes rates in 2015
NEW YORK (MarketWatch) -- After an initial positive jolt,
U.S.have pulled back in the wake of the latest minutes from last
month's meeting of the Federal Open Market Committee.
Central bank officials were intent to raise rates next year even
as they were concerned about low inflation and weakness in the
global economy. It is unclear what triggered such a downbeat
reaction in the market.
On Oct. 29, the Fed voted to end its asset purchase program, by
a 9-1 vote, and repeated that rates are likely to stay near zero
for "a considerable time," adding language that the first move
could come sooner if the economy is stronger than expected.
The S&P 500 (SPX) and the Dow Jones Industrial Average (DJI)
were off their lows, but still languished in negative territory.
The Dow had popped marginally higher immediately after the Fed
minutes were released before sinking. The Nasdaq Composite (RIXF)
edged lower.
In economic news, construction started on new U.S. homes fell in
October, led down by volatile apartment construction. However,
construction starts for single-family homes rose to hit the highest
pace since November 2013. The headline number was slightly below
forecasts and market reaction ahead of the opening bell was
muted.
Retail names report: Home improvement and office-goods retailing
sectors rolled out earnings early, and so far, so good. Lowe's
(LOW) shares rose after the home-improvement retailer lifted its
sales outlook and beat forecasts with its results.(LOW) Staples
(SPLS) gained after its earnings.Target (TGT) shares surged after
earnings release.
La-Z-Boy Inc. (LZB) continued to rise after the furniture maker
beat Wall Street expectations late Tuesday. Jack in the Box Inc.
(JACK) shares also rose on a gain in sales.
TransCanada Corp. (TRP) shares rose even as the Senate last
night narrowly rejected a bill to approve the construction of the
company's Keystone XL oil pipeline.
Bank of Japan, Bank of England weigh in: The dollar(USDJPY) hit
fresh seven-year highs against the yen, shooting past Yen117. The
Bank of Japan on Wednesday stuck to maintaining its large-scale
easing policy and its upbeat assessment of the economy despite
downbeat economic -growth figures that prompted Prime Minister
Shinzo Abe to delay a tax increase and call early elections. Read:
Potential crises make the dollar the place to be
The Nikkei 225 fell 0.3% in its first chance to react since Abe announced the plans.
In the U.K., meanwhile, minutes of the Bank of England's
rate-setting Monetary Policy Committee's November policy meeting
hinted at deepening divisions and concerns from some members that
the U.K. could overshoot its inflation target. The FTSE 100 index
pulled back slightly while some European stocks managed modest
gains.
Oil prices(CLZ4) remained rangebound, while gold (GCZ4) ticked
down, falling just below $1,200 an ounce.
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