By Wallace Witkowski and William Watts, MarketWatch

Alcoa earnings on tap after the closing bell

SAN FRANCISCO (MarketWatch) --U.S. stocks took a volatile tumble only to recover quickly after meeting minutes from March showed several Federal Reserve officials were in favor of a June rate hike.

The S&P 500 (SPX) rose 3 points, or 0.2%, to 2,079, following a brief dip into negative territory following the minutes. The Dow Jones Industrial Average (DJI), which took a deeper swing into the red, was up 7 points to 17,882 The Nasdaq Composite Index (RIXF), which had stayed in positive territory, was up about 30 points, or 0.6%, to 4,940.

Stocks weakened soon after the minutes were released. While several members appeared to support a June rate hike (http://www.marketwatch.com/story/several-on-fed-favored-june-rate-increase-minutes-2015-04-08)back in mid-March, the meeting minutes doesn't reflect a spate of economic reports, including last Friday's jobs data, signaling softness in the U.S. economy.

Ahead of the release of the minutes, New York Fed President William Dudley suggested that the bar for raising rates in June is high (http://www.marketwatch.com/story/feds-dudley-bar-higher-for-june-move-2015-04-08), given recent signs of economic weakness.

Also, Federal Reserve Gov. Jerome Powell, in a speech, said he expects economic conditions to support a rate hike (http://www.marketwatch.com/story/feds-powell-sees-first-rate-increase-later-this-year-2015-04-08) later this year. Powell also said he wasn't troubled by equity valuations and that the Fed was unlikely to put "its toe in the water" and declare overly high stock prices to be a justification for a rate hike.

At least some Wall Street investors believe the Fed's minutes don't reflect the current state of the market. "To some degree, the importance of these FOMC minutes has been somewhat diminished," wrote Dan Greenhaus, chief strategist at BTIG in a research note following the release of minutes.

"After all, the less-than-stellar monthly payroll report was released afterwards. Whatever level of hawkishness may have been in place in March such that the FOMC thought it appropriate to drop "patient" is, however modestly, less so today," Greenhaus added.

Wednesday's other big story was oil, which tanked after the Energy Information Administration reported that domestic-crude inventories rose a higher-than-expected 10.9 million barrels (http://www.marketwatch.com/story/oil-futures-extend-drop-after-crude-inventories-jump-2015-04-08) to 482.4 million. The increase comes as the market has been fretting about a global oil glut.

The oil inventory news and Fed minutes come as investors await the unofficial start to corporate-earnings season with Alcoa set to report after Wednesday's close.

Trading in the S&P 500 got a boost from Mylan N.V. (MYL), which jumped 16% on the heels of news that it was proposing to acquire Dublin-based pharmaceutical company Perrigo Co. PLC (http://www.marketwatch.com/story/mylan-offers-to-buy-perrigo-for-205-a-share-in-cash-and-stock-2015-04-08)(PRGO) for $205 a share. Perrigo's shares were soaring 20% on the news.

About seven of the 10 sectors of the S&P 500 were trading higher, led by health care and consumer discretionary, while telecom and energy were lower.

Visa Inc. (V) and Nike Inc. (NKE) were leading gainers among the Dow industrial components.

Need to know: Sideways market looks to Fed minutes, earnings kickoff for direction (http://www.marketwatch.com/story/sideways-market-looks-to-fed-minutes-earnings-kickoff-for-direction-2015-04-08)

Energy shares were expected to remain in focus on Wednesday.

Oil prices (http://www.marketwatch.com/story/oil-prices-ease-ahead-of-us-inventory-data-record-saudi-output-2015-04-08)(CLK5) swooned after EIA's report, indicated that domestic crude oil inventories have reached their highest level for this time of the year in 80 years. Crude-oil futures were already under pressure earlier in the session on news that Saudi Arabia had raised its output to record levels (http://www.marketwatch.com/story/saudi-arabia-crude-output-at-record-high-in-march-2015-04-08).

In a sign of how lower oil prices are shaking up the industry, Royal Dutch Shell Group PLC (RDSA) (RDSB) said it would buy BG Group (BRGYY) in a deal worth nearly $70 billion (http://www.marketwatch.com/story/shell-to-buy-bg-group-in-696-billion-deal-2015-04-08). U.S.-listed shares of Shell fell about 4%, but shares of BP PLC (BP) rose 0.5% as the deal was expected to trigger more consolidation speculation in the industry. BG shares jumped 26%.

Shell CEO: BG deal isn't a bet on oil prices (http://www.marketwatch.com/story/shell-ceo-bg-deals-not-a-bet-on-oil-price-2015-04-08)

(http://www.marketwatch.com/story/shell-ceo-bg-deals-not-a-bet-on-oil-price-2015-04-08)Also: Who's the next target for oil M&A after the Shell-BG deal? (http://www.marketwatch.com/story/whos-the-next-target-for-oil-ma-after-the-shell-bg-deal-2015-04-08)

Stocks to watch: Outside of oil stocks, Alcoa(AA) will be on center stage after the closing bell with analysts surveyed by FactSet expecting first-quarter earnings of 26 cents a share. Bed Bath & Beyond Inc.(BBBY) will also report after the market's close.

Shares of Apple Inc. (AAPL) edged own 0.2% after a downgrade by Société Générale.

Rite Aid Corp. (RAD) shares rose. The company posted better-than-expected profit for its fiscal fourth quarter. Family Dollar Stores Inc. (FDO) also gained ground after posting sales and profit that were better than Street estimates (http://www.marketwatch.com/story/family-dollar-sales-profit-match-expectations-2015-04-08).

Other markets: Gold prices (GCM5) inched lower, while the dollar (DXY) shifted lower against the yen specifically after the Bank of Japan held its policy steady (http://www.marketwatch.com/story/bank-of-japan-maintains-monetary-easing-policy-2015-04-08).

Asian stocks had a largely positive day, with the Nikkei 225 index closing up 0.8%. European stocks marked a record high, and London's FTSE 100 index got a boost on the Shell-BG deal news.

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