By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch)-- U.S. stocks struggled to build on
opening gains on Wednesday as investors focused on earnings results
and awaited minutes of the Federal Reserve's most recent
meeting.
The S&P 500 (SPX) was 2.5 points, or 0.1%, higher at
1,854.76. The Dow Jones Industrial Average (DJI) added 34 points,
or 0.2%, to 16,297.56. The Nasdaq Composite (RIXF) rose 22 points,
or 0.5%, to 4,134.72.
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action.
Alcoa Inc. and Constellation Brands, Inc. reported earnings with
mixed results. J.P. Morgan (JPM) and Wells Fargo (WFC) are
scheduled to report on Friday.
Drew Wilson, investment analyst at Fenimore Asset Management,
says in the absence of macro and political news, markets are
focusing on earnings.
"Correlation between stocks has fallen and continues to
diminish, which means that markets are reacting to company-specific
news, rather than trading in risk-on/risk-off environment. Markets
are starting to distinguish profitable companies from nonprofitable
ones and reward or punish them for their earnings," Wilson
said.
"This is evident from the shift away from momentum stocks whose
valuations were too high. We see it as a positive for the markets,
they are getting healthier," he added.
Wednesday's economic calendar includes the release of the
minutes from the Federal Reserve's Federal Open Market Committee
meeting at 2 p.m. Eastern. Investors hope the minutes will give
some insight to the Fed officials' decision to discard the 6.5%
unemployment rate threshold for interest-rate increases.
Fed officials have publicly encouraged a view that the first
interest-rate increase won't happen until the second half of 2015
at the earliest, and most economists don't expect the minutes to
sway from that. Spotlight on economy: A chance to read the Fed tea
leaves on Wednesday.
Late Tuesday, Federal Reserve Bank of Chicago President Charles
Evans said there is a risk that policy makers will
"withdraw...accommodative policies prematurely," The Wall Street
Journal reported.
"I think it's just human nature to start thinking we've been
doing this for a long time," Evans reportedly said.
Evans also is scheduled to speak in Washington, D.C., Wednesday
at the Hyman Minsky Conference on "Stabilizing Financial Systems
for Growth and Full Employment" at 3:30 p.m. Eastern. Fed Governor
Daniel Tarullo is set to speak at the same conference at 7 p.m.
Eastern.
In addition, a report on wholesale inventories for February will
be released at 10 a.m. Eastern Time.
Alcoa, Constellation
Among individual companies, Alcoa (AA) shares rose 3.9% after
the aluminum producer's adjusted earnings per share topped
estimates, though revenue came in just under expectations. The
company also said it still expected aluminum demand to rise around
7% this year. The company reported earnings results after market
close on Tuesday. See: Why Alcoa still matters to investors.
In other earning news, Constant Contact Inc. (CTCT) jumped 27%
after the online marketing company posted results late Tuesday.
Constellation Brands Inc. (STZ) initially rose, but reversed
gains and was 2% lower after posting fiscal fourth-quarter earnings
above consensus estimates.
Intuitive Surgical Inc. (ISRG) was down 6.9%, following an 8%
late-session drop Tuesday after the surgical robot maker warned on
revenue.
In other markets, gold (GCK4) edged lower, while crude oil
(CLK4) inched up. Wall Street's higher run on Tuesday inspired
gains for Europe and most of Asia, with the exception of the Nikkei
225 index . The Tokyo benchmark fell 2.1% as the yen (USDJPY)
rallied overnight against the dollar and as Toyota Motor Inc. (TM)
fell more than 3% on reports the auto maker recalled 6.4 million
vehicles world-wide.
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