Most U.S. stocks were little changed Wednesday as Federal Reserve minutes offered investors few new insights about the next interest-rate increase.
Investors had come to expect that the Fed would raise short-term interest rates in December, with recent comments from Fed officials bolstering the case. But minutes from the Fed's September meeting show that while some policy makers called for a rate increase "relatively soon," members clashed over the timing of the move.
Income-paying stocks led Wednesday's gains, recovering slightly after falling out of favor in recent months. Yield-hungry investors had bid up these sectors for their dividend payments in the first half of the year. Real-estate stocks in the S&P 500 rose 1.3%, while utility stocks rose 1%.
"The yield play is happening because people are going to question whether or not the Fed is actually going to pull the trigger in December," said Ray Moore, a trader at Raymond James. "The market interpreted the Fed minutes and believes a rate increase this year is less likely."
The Dow Jones Industrial Average edged up 16 points, or 0.1%, to 18144. The S&P 500 rose 0.1%, while the Nasdaq Composite edged down 0.1%.
In bonds, the yield on the 10-year U.S. Treasury note rose to 1.778, paring gains after investors found little in the Fed minutes to reaffirm expectations of a rate increase before year-end.
Investors are now turning their attention to earnings. Aluminum giant Alcoa fell 2.9%, a day after losing 11% from announcing disappointing third-quarter earnings, kicking off the U.S. earnings season on a down note.
In the three quarters in which Alcoa has fallen more than 10% following its report, the S&P 500 traded down 7.5%, 2.6%, and 6.5% for the remainder of those three earnings seasons, according to Bespoke Investment Group.
Shares of Illumina fell 2%, after tumbling 25% a day earlier on news that the company was cutting its revenue guidance. Health-care stocks in the S&P 500 led declines for the second session in a row, while the Nasdaq Biotechnology Index lost 2.5%.
U.S. crude oil fell 1.2% to $ 50.18 a barrel after the Organization of the Petroleum Exporting Countries said its production increased last month. OPEC members had reached an agreement last month to cut production, though details on how to execute are still being negotiated.
Overseas, the Stoxx Europe 600 fell 0.5%. The British pound rose to $ 1.2207 after four consecutive days of losses. The pound touched a historic low against a basket of currencies Tuesday, according to Bank of England data. It recovered during Asian trading hours, rising more than 1.5% against the dollar, after media reports suggested that U.K. Prime Minister Theresa May had agreed to hold a parliamentary vote on her plans for taking Britain out of the European Union.
London's export-heavy FTSE 100 index, which touched its highest level in decades Tuesday, pulled back 0.7% as the British currency recovered.
The WSJ Dollar index, which measures the dollar against a basket of 16 currencies, rose 0.2%.
Earlier, shares in Asia fell on continued expectations for a U.S. rate increase in December. Japan's Nikkei Stock Average fell 1.1%, while the Hang Seng Index fell 0.6%.
—Hiroyuki Kachi and Matthias Verbergt contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Daniel Huang at dan.huang@wsj.com
No comments:
Post a Comment