By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks stepped higher on
Wednesday afternoon, shaking off a dip that came after Federal
Reserve minutes indicated that policy makers talked at their last
meeting about hiking interest rates sooner than anticipated.
The S&P 500 (SPX) rose by 6 points, or 0.3%, to 1,987. The
benchmark turned negative shortly after the minutes came out at 2
p.m. Eastern, but it has bounced back and briefly traded above its
July 24 record close of 1,987.98.
The Dow Jones Industrial Average(DJI) tacked on 67 points, or
0.4%, to 16,987, while the Nadaq Composite(RIXF) gained 3 points,
or 0.1%, to 4,531.
Fed officials debated at their July meeting whether to move
faster than expected to start raising interest rates in light of an
improving job market and rising inflation, said a Wall Street
Journal report on the minutes. But the officials decided they
needed more evidence before concluding that was the right approach.
(Read more: Fed more divided on U:S: labor market gains
http://www.marketwatch.com/story/fed-more-divided-on-us-labor-market-gains-2014-08-20.)
"The center of gravity is moving gradually to the hawkish side,"
said Jerry Webman chief economist at OppenheimerFunds. The stock
market "likes accommodation," so it gave up a little ground after
the minutes, he told MarketWatch. But there wasn't a more extreme
negative reaction because the minutes don't give a reason to get
pessimistic about corporate earnings, which are the market's main
driver, he added.
The minutes didn't contain "anything shocking," and there wasn't
a big drop by stocks, so the market resumed its two-week uptrend,
said Joe Bell, senior equity analyst for Schaeffer's Investment
Research.
While investors are reading the minutes for clues about the
Fed's strategy, markets may also quickly move past them to focus on
Fed Chairwoman Janet Yellen's speech at 10 a.m. Eastern Friday in
Jackson Hole, Wyo. Read: Yellen to stress patience on rates at
Jackson Hole
Staples Inc.(SPLS) helped keep a lid on the S&P 500's gains,
becoming the index's worst performer of the day after the retailer
reported a drop in quarterly profit and sales. Apple Inc.(AAPL)
gained 0.4% to $100.90 and hit an intraday split-adjusted record of
$101.09.
What strategists are saying: The S&P 500 could face
resistance in the short term as the benchmark nears its prior
record close, said Schaeffer's Bell. Prior highs "generally act as
some sort of speed bump," he told MarketWatch.
Movers & shakers: Hertz Global Holdings Inc.(HTZ) shares
slumped 10% after the rental-car company said it expects to be
"well below the low end" of guidance. Also read: It's 'difficult to
find any positives' in Hertz warning
Apple's jump to an intraday record comes after the tech giant
nailed an all-time split-adjusted closing high of $100.53 on
Tuesday. Read: 7 reasons why this product cycle will be different
for Apple
Lowe's Cos.(LOW) rose 1.7%, while Target Corp. (TGT) was up
1.3%. Each retailer had dropped earlier Wednesday after cutting its
guidance. (Read more about today's jumpiest stocks in the Movers
& Shakers column
http://www.marketwatch.com/story/target-lowes-petsmart-report-earnings-wednesday-2014-08-19.)
Other markets: The Stoxx Europe 600 closed lower, halting a
two-day rally. In Asia, stocks finished with moderate gains,
outside a small loss for the Shanghai Composite .
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