By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market edged higher in
early trade Wednesday, building on the biggest one-day gain in four
weeks during the previous session and sending the Dow Jones
Industrial Average to intraday record high.
Investors welcomed an unexpected drop in consumer price index--a
key inflation measure. Falling inflation may embolden Federal
Reserve doves to keep interest rates low for longer.
Worries about the Federal Open Market Committee meeting
conclusions have colored much of the market action in the past few
days. However, earlier sentiment on Wednesday was lifted by
People's Bank of China's most recent steps to inject billions into
its banking system in order to boost flagging growth.
The S&P 500 (SPX) rose 2 points, or 0.1 to 2.001.20. The Dow
Jones Industrial Average (DJI) added 15 points, or 0.1% to
17,148.05. The Nasdaq Composite (RIXF) ticked up 5 points, or 0.1%,
to 4,559.59.
Follow today's stock market coverage in a live blog.
In economic news, U.S. consumer prices fell in August for the
first time in 16 months, largely because of a decline in the cost
of filling up at the gas station, the government reported
Wednesday. Separately, the U.S. current account deficit fell to
$98.5 billion in the second quarter from a revised $102.2 billion
in the first quarter, the Commerce Department said Wednesday.
A home builders' index is scheduled for 10 a.m. Eastern
Time.
Wednesday's spotlight falls on the FOMC statement, due at 2 p.m.
Eastern Time. That will be followed by a news conference with
Federal Reserve Chairwoman Janet Yellen. Also read: Eight keys to
Fed's September meeting and Fed's exit plan may be a bumpy ride for
investors
If the "considerable time" phrase sticks, the market will be
left as complacent on interest rates as it was two weeks ago, said
Chris Beauchamp, market analyst at IG, in a note. However, that
also could mean that equity markets get a boost after fretting in
recent sessions about the Fed plans, he added. Need to Know: Two
aging techs may be getting whipped back into 1990s shape
In Asia, Hong Kong stocks broke a five-session losing streak
after a senior Chinese banking executive said the People's Bank of
China is injecting 500 billion yuan ($81 billion) into the
country's five big state-owned banks to help counter an economic
slowdown. A string of recent weak data has heightened worries among
investors.
Stocks to watch: Auxilium Pharmaceuticals Inc. (AUXL) soared
42%, after news late Tuesday that Endo International PLC (ENDP)
will buy it for $28.10 per share in a cash-and-stock deal. Endo was
up 5%.
Lennar Corp.(LEN) rose 4.8% after posting a 47% rise in
third-quarter profit on Wednesday as higher prices and deliveries
drove up revenue.
General Mills Inc. (GIS) fell 2% after posting a disappointing
quarterly profit.
DuPont (DD) shares rose 3.8% after an investor urged a breakup
of the company.
FedEx Corp. (FDX) rose 3.7% after posting better-than-expected
profit and sales.
U.S. Steel Corp. (X) was up 10% after the company said it was
making major strategic changes late Tuesday.
Adobe Systems Inc. (ADBE) fell 3%. The software maker posted
quarterly results on Tuesday.
Rackspace Hosting Inc. (RAX) tumbled 15% after the
cloud-computing company said it won't be selling itself. (Read more
about the day's notable movers here
http://www.marketwatch.com/story/adobe-rackspace-fedex-expected-to-be-in-spotlight-2014-09-17.).
Other markets: The Stoxx Europe 600 index took inspiration from
Wall Street and China stimulus, while the FTSE 100 managed small
gains ahead of Thursday's vote on Scottish independence. Gold(GCZ4)
was unable to hang onto positive territory. Barclays cut its
forecast for the metal, citing risks skewed to the downside. Oil
prices (CLZ4) were largely unchanged.
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