By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks reversed earlier gains and
moved lower on Wednesday after Atlanta Federal Reserve President
Dennis Lockhart said he expects a mid-2015 interest-rate hike while
the IMF warned of a still-weak economic recovery with significant
risks remaining.
Investors are awaiting the minutes from the Federal Reserve's
policy-setting meeting and will look for any clues about the
central bank's view of the economy.
The S&P 500 index (SPX) was 5 points, or 0.3%, lower at
1,835.44, after being within a hair's breadth from its all-time
high reached on Jan 15.
The Dow Jones Industrial Average (DJI) added as much as 95
points before it, too, reversed. The blue-chip index recently was
down 27 points, or 0.2%, to 16,092.23.
The Nasdaq Composite (RIXF) fell 18 points, or 0.4%, to
4,273.05, putting it on track to snap an eight-session winning
streak. Follow our stock market live blog.
Dennis Lockhart, the president of the Atlanta Federal Reserve,
said Wednesday he still thinks the central bank will first hike
short-term interest rates in the second half of 2015. St. Louis Fed
President James Bullard repeated he sees a 3% growth rate in 2014
and says weather impacted recent data.
Economic data: Housing starts, wholesale prices
"With the weather being this cold, it is hard to draw
conclusions from housing reports," said Terry Sandven, senior
equity strategist at U.S. Bank Wealth Management. "Both the
headline number and building permits were below expectations, but
not at worrying levels."
He noted that earnings growth so far this season has beaten
expectations, and said he remains optimistic about the market this
year.
Construction on new U.S. homes tumbled 16% in January to a
seasonally adjusted annual rate of 880,000, with drops for
single-family homes and apartments, according to Commerce
Department. Economists polled by MarketWatch said particularly poor
weather hit construction last month. Building permits, a sign of
future demand, fell to the lowest rate since August.
U.S. producer prices rose in January under the government's new
formula for measuring wholesale inflation, the Labor Department
said Wednesday.
Investors will also focus on the minutes from the Federal
Reserve's policy-setting meeting in January, scheduled for 2 p.m.
Eastern. At the meeting, the Federal Open Market Committee voted to
cut back its asset-purchase program by another $10 billion.
Movers: Zale, Chelsea Therapeutics International soar
Shares of Zale (ZLC) soared 40% after Signet Jewelers Ltd. (SIG)
said it would buy its smaller rival for about $690 million in an
all-cash deal. Signet shares rose 17%.
Chelsea Therapeutics International Ltd. (CHTPE) shares surged
28% after the U.S. Food and Drug Administration conditionally
approved the pharmaceutical company's new drug for treating
symptomatic neurogenic orthostatic hypotension. The drug, called
Northera, received an accelerated approval since it was deemed to
treat a serious unmet medical condition.
Garmin Ltd. (GRMN) climbed 8.2% after the company's earnings
beat Wall Street expectations. The provider of standalone global
positioning systems said its nonautomotive and mobile segments of
its business made up 50% of the company's total revenue.
Carlyle Group (CG) shares rallied 2.7% after the company's
fourth-quarter earnings beat expectations.
Among decliners, Potbelly Corp. (PBPB) slid 11% after earnings
per share beat estimates, but revenue, comparable-store sales and
outlook all fell short of expectations.
La-Z-Boy Inc. (LZB) dropped 4.6% after the firm reported fiscal
third-quarter results late Tuesday that failed to meet analyst
estimates.
Tesla Motors Inc. (TSLA) and Safeway (SWY) are expected to
report fourth-quarter results after the market close.
Overseas: UK unemployment rate rises
In other financial markets, the dollar rose against the pound
after the U.K. unemployment rate unexpectedly rose in the three
months to December, easing pressure on the Bank of England to raise
interest rates. Interest-rate hikes tend to be supportive for that
country's currency. The dollar index edged up after U.S. housing
and inflation reports.
European stocks traded mostly lower, while Asia markets closed
mixed. Most metals prices declined and oil prices inched
higher.
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