By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks, which were trading higher
most of the session on Wednesday, jumped after minutes of the
Federal Reserve's most recent meeting revealed policy-makers
dropped a jobless target for raising interest rates during a secret
meeting in early March.
The S&P 500 (SPX) rose 13.54 points, or 0.7%, to 1,865.41.
The Dow Jones Industrial Average (DJI) jumped 130 points, or 0.8%,
to 16,383.30. The Nasdaq Composite (RIXF) added 49.70 points, or
1.2%, to 4,162.72.
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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 markets are focusing on earnings in the absence of macro and
political news.
"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.
Federal Reserve officials had a secret video conference call in
early March to discuss overhauling its communication to the market
and reached a general consensus that the 6.5% unemployment rate
threshold for the first rate hike was outdated, the central bank
said Wednesday. A summary of the video conference was included in
the minutes of the Fed's March 18-19 meeting released by the Fed.
On the conference call, the central bankers were clearly worried
that changing the forward guidance would impact markets.
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 3.2% 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 28%
after the online marketing company posted results late Tuesday.
Constellation Brands Inc. (STZ) initially rose, but reversed
gains and was 2.9% lower after posting fiscal fourth-quarter
earnings above consensus estimates.
Intuitive Surgical Inc. (ISRG) was down 7.1%, 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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