Disbanding of Trump's advisory panels contributes to uncertainty
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U.S. stocks closed moderately higher Wednesday, restoring the Dow above the psychologically-important 22,000 mark, after Federal Reserve minutes suggested that the central bank is wrestling with sluggish inflation but eager to commence an unwind of its $4.5 trillion asset portfolio.
The market's gains came after a volatile session, reflecting uncertainty about the strategic path for the central bank and political tensions facing President Donald Trump that could disrupt his pro-growth agenda.
The S&P 500 rose 3.5 points, or 0.1%, to close at 2,468.11, with the materials sector leading, while energy fell 1.1%.
The Dow Jones Industrial Average climbed 25.88 points, or 0.1%, to end at 22,024.87, extending its winning streak to a fourth session. The technology-laden Nasdaq Composite Index rose 12.10 points, or 0.2%, to close at 6,345.11.
The minutes from the Fed's meeting in July (http://www.marketwatch.com/story/fed-eyes-september-debt-drawdown-some-want-patient-on-rates-2017-08-16) showed that most Fed officials wanted to wait until the next monetary meeting to unveil details on its planned unwinding of its $4.5 trillion in bondholdings, indicating an announcement is possible in September. The Fed also discussed the surprisingly low inflation readings, with a few officials noting that the Fed could be patient before raising interest rates again.
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"The debate around the inflation shortfall was more robust this month than last -- as it should have been, which I think makes the minutes read a touch dovish," Eric Winograd, senior economist at AllianceBernstein, said in a note.
Stocks lost some momentum earlier as Trump announced the disbanding of a pair of advisory panels (http://www.marketwatch.com/story/trump-business-councils-disband-amid-wave-of-ceo-exits-2017-08-16) following departures of corporate leaders after widespread criticism over Trump's reaction and remarks to the weekend's violence in Charlottesville, Va..
The latest drama has sparked nervousness over the possible derailment of Trump's economic agenda, including tax and regulatory reforms, said Kent Engelke, chief economic strategist at Capitol Securities Management.
Still, recent trading has had an upward bias, even given an uncertain geopolitical environment that pressured stocks last week. The Dow has risen in 14 of the past 17 sessions, including Wednesday, and major indexes are within striking distance of record levels.
Even news that housing starts fell 5.6% in July (http://www.marketwatch.com/story/housing-starts-stumble-in-july-as-new-home-construction-churns-gradually-higher-2017-08-16) isn't dragging on the market, as the weak number is a result of tight supply rather than weak demand, according to Engelke.
Stock movers:Target Corp. (TGT) rose 3.6% after the retailer reported an increase in same-store sales (http://www.marketwatch.com/story/target-sees-sales-growth-as-it-plans-store-refresh-2017-08-16-74853019) and lifted its full-year adjusted profit outlook.
Shares of Urban Outfitters Inc.(URBN) soared 18% after the retailer late Tuesday reported earnings that easily beat estimates (http://www.marketwatch.com/story/urban-outfitters-shares-rally-after-sales-earnings-beat-2017-08-15).
Agilent Technologies Inc.(A) also reported profit above forecasts (http://www.marketwatch.com/story/agilent-shares-rise-more-than-4-after-company-reports-sales-eps-above-forecast-2017-08-15), sending shares 4.7% higher as one of the biggest percentage gainers among S&P 500 components.
Campbell Soup Co. (CPB) rose 0.5% and 3M Co.(MMM) gained 0.4% after chief executives of the two companies stepped down from Trump's manufacturing initiative in protest over his failure to denounce neo-Nazi and white supremacists who were at the center of chaos over the weekend.
Other markets:Asian markets closed mixed (http://www.marketwatch.com/story/asian-markets-take-a-breather-after-early-week-rebound-2017-08-15), while European stocks headed higher for a third straight day (http://www.marketwatch.com/topics/columns/europe-markets).
The ICE Dollar Index reversed gains and gold rose following the Fed minutes. Oil prices (http://www.marketwatch.com/story/oil-prices-rise-on-hopes-for-another-big-drop-in-us-inventories-2017-08-16) settled lower after the Energy Information Administration said crude supplies fell for a seventh week but domestic production reached rose to the highest weekly level in over two years.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
August 16, 2017 16:37 ET (20:37 GMT)