Stocks Recover From Early Weakness To Close Slightly Higher - U.S. Commentary

(RTTNews) - After recovering from an early move to the downside, stocks finished Wednesday's trading session modestly higher. The slim gains on the day came on the heels of the pullback that was seen in the previous session.

The major averages ended the day just above the unchanged line. The Dow edged up by 21.92 points or 0.1 percent to 18,573.94, the Nasdaq crept up by 1.55 points or less than a tenth of a percent to 5,228.66 and the S&P 500 rose by 4.07 points or 0.2 percent to 2,182.22.

The modestly higher close on Wall Street came following the release of the minutes of the Federal Reserve's latest meeting, which suggested that officials were mixed about the outlook for monetary policy.

The minutes from the July meeting revealed that Fed officials generally agreed that it was prudent to accumulate more economic data before removing monetary accommodation.

However, the Fed said "some" members anticipated that economic conditions would soon warrant taking another step in removing policy accommodation.

Kansas City Fed president Esther George voted to raise interest rates, citing the easing of financial conditions since the U.K.'s Brexit vote, the return to trend economic growth, solid job growth, and inflation moving toward 2 percent.

Earlier in the day, negative sentiment was generated in reaction to quarterly results from retail giants Target (TGT) and Lowe's (LOW).

Target reported better than expected second quarter earnings but lowered its full-year guidance due to a "difficult retail environment."

Home improvement retailer Lowe's also came under pressure after reporting second quarter results that came in below analyst estimates.

Sector News

Utilities stocks reacted positively to the Fed minutes, resulting in a 1.6 percent advanced by the Dow Jones Utilities Average. The gain by the index came after it ended the previous session at a two-month closing low.

Dominion Resources (D), AES Corp. (AES), and CenterPoint Energy (CNP) turned in some of the utilities sector's best performances on the day.

Considerable strength also emerged among railroad stocks, as reflected by the 1.4 percent gain posted by the Dow Jones Railroads Index.

On the other hand, gold stocks came under pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent.

The weakness in the gold sector came amid a decrease by the price of the precious metal, with gold for December delivery sliding $8.10 to $1,348.80 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index dipped by 0.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index slid by 1 percent and the German DAX Index slumped by 1.3 percent.

In the bond market, treasuries ended the day modestly higher following the release of the Fed minutes. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.5 basis points to 1.561 percent.

Looking Ahead

Trading on Thursday may continue to be impacted by reaction to the Fed minutes along with reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading economic indicators.

Cisco Systems (CSCO) is also due to release its quarterly results after the close of today's trading, while Wal-Mart (WMT) is due to report its results before the start of trading on Thursday.