By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks moved lower on Wednesday
after the minutes from the Federal Reserve's policy setting meeting
revealed little consensus about when short-term rates would begin
to rise.
The S&P 500 index (SPX) was 10.90 points, or 0.6%, lower at
1,830.06, 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 65.55 points, or 0.4%, at 16,063.74.
The Nasdaq Composite (RIXF) fell 36.36 points, or 0.8%, to
4,235.98, putting it on track to snap an eight-session winning
streak. Follow our stock market live blog.
"The Fed succeeded in letting the markets function on their own
and we can see that in the near-5% rise in February, which was all
driven by better-than-expected earnings," said Doug Cote, chief
investment strategist at ING Investment Management.
"It is very clear the taper will continue at a $10bn-a-month
rate and finish by the end of the year. New chairwoman Janet Yellen
also inspires of lot of confidence -- she is a strong consensus
builder and will continue with the low-rate policy," he added.
At the January meeting, Fed officials agreed unanimously to
continue to slowly reduce the pace of the central's asset-purchase
program by another $10 billion to $65 billion per month and to
pledge to keep rates low until "well past" the point where the
unemployment rate fell below a 6.5% threshold. This was the first
unanimous statement since 2011. However, minutes revealed little
consensus over short-term rates and some doubts about whether the
central bank should continue to reduce the pace of asset
purchases.
Before the release of minutes, stocks reversed gains after a
spate of speeches from Federal Reserve officials. Atlanta Federal
Reserve President Dennis Lockhart said he expects a mid-2015
interest-rate hike. Separately, the IMF warned of a still-weak
economic recovery with significant risks remaining.
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.
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
22% 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 9.6% 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 initially after the company's
fourth-quarter earnings beat expectations, however, shares lost
momentum and dropped 0.6%.
Among decliners, Potbelly Corp. (PBPB) slid 8.4% after earnings
per share beat estimates, but revenue, comparable-store sales and
outlook all fell short of expectations.
La-Z-Boy Inc. (LZB) dropped 1.9% 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.
Other markets: Dollar rises, gold falls after Fed minutes.
The dollar edged up while gold futures settled lower and lost
even more ground after the Fed minutes. 10-year Treasury yields
also rose to 2.73% while oil prices edged up.
European stocks ended slightly higher, while Asia markets closed
mixed.
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