By Wallace Witkowski and William Watts, MarketWatch
Stocks choppy as investors digest minutes against recent
data
SAN FRANCISCO (MarketWatch) -- U.S. stocks closed slightly
higher Wednesday in volatile trading following the release of
Federal Reserve meeting minutes where several Federal Reserve
officials had favored a June rate hike.
The S&P 500 (SPX) closed up 5.57 points, or 0.3%, to
2,081.90, after being down as many as 3 points earlier in the day.
The Dow Jones Industrial Average (DJI), which had been up as many
as 100 points before the minutes and down as many as 53 points
after the minutes, finished up 27.09 points, or 0.2%, at
17,902.51.
The Nasdaq Composite Index (RIXF), which remained in positive
territory for the session, closed up 40.59 points, or 0.8%, to
4,950.82.
While several Fed 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 don't reflect a spate of economic
reports, including last Friday's jobs data, signaling softness in
the U.S. economy.
"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," said Dan Greenhaus, chief
strategist at BTIG, in emailed comments.
What's just as important is how divided Fed members seem,
Greenhaus said, given the balanced dovish and hawkish tones of the
minutes. What's particularly interesting, Greenhaus points out, is
language on holding the federal funds rate below its normal run
level because "the headwinds that have been holding back the
recovery will continue to exert some restraint on economic
activity."
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.
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.
Trading in the S&P 500 got a boost from Mylan N.V. (MYL),
which jumped 15% 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 closed up 18% on the news.
Seven of the 10 sectors of the S&P 500 closed higher, led by
health care and consumer discretionary. Telecom and energy were the
biggest laggards.
Nike Inc. (NKE) and Home Depot Inc. (HD) led 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 in focus on Wednesday as oil prices (CLK5)
swooned after the 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 nearly 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
27%.
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 Inc.(AA) fell
under pressure after hours
(http://www.marketwatch.com/story/alcoa-shares-down-after-missed-first-quarter-revenues-2015-04-08-16912245)on
quarterly revenue that fell short of Wall Street estimates. Bed
Bath & Beyond Inc.(BBBY) also declined on sales and outlook
misses
(http://www.marketwatch.com/story/bed-bath-beyond-shares-drop-after-q4-sales-q1-forecast-miss-2015-04-08).
Shares of Apple Inc. (AAPL) closed down 0.3% 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) settled 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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