Target rallies after raising outlook
U.S. stocks rose on Wednesday, putting the Dow on track for its fourth straight daily gain, though traders were taking a cautious approach ahead of the latest Federal Reserve minutes, which could indicate whether more rate increases are coming this year.
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The Dow Jones Industrial Average rose 66 points, or 0.3%, to 22,062, with United Technologies Corp.(UTX) and Home Depot Inc. (HD) helping to support the blue-chip gauge. The S&P 500 rose about 6 points, or 0.3%, to 2,471 and the technology-laden Nasdaq Composite Index added 24 points, or 0.4%, to 6,357.
"Consumer sentiment is high and there is a perception that Republicans are unified on tax reforms," which are helping to offset the potentially negative impact from headlines, said Kent Engelke, chief economic strategist at Capitol Securities Management.
The day's gains were broad, with nine of the 11 primary S&P 500 sectors higher. But energy and telecommunications sectors were weak.
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) is not dragging on the market as the weak number is a result of tight supply rather than weak demand, according to Engelke.
Recent trading has had an upward bias, even given an uncertain geopolitical environment that pressured stocks last week. The Dow has risen in 13 of the past 16 sessions, excluding Wednesday, and major indexes are within striking distance of record levels.
"This is a momentum-driven move. The path of least resistance has been up, last week's hiccup not withstanding, and unless the Fed says something unexpected I think the market is in a trend that it likes," said Steve Sosnick, chief options strategist at Interactive Brokers Group.
However, he added that he was "somewhat concerned about valuations" given current levels. "Not everything is expensive, but when you get to historically high [price-to-earnings ratios] you have to be concerned about it. But whether that's an immediate worry or just in the backdrop remains to be seen."
U.S. stocks closed mixed on Tuesday (http://www.marketwatch.com/story/us-stocks-eye-opening-gains-as-north-korea-pulls-back-on-guam-threat-2017-08-15), with the Dow average ending slightly higher for a third straight session, though the S&P 500 index and Nasdaq Composite Index finishing with small losses. The mixed session came after retail sales beat forecasts and as tensions between the U.S. and North Korea eased after Kim Jong Un decided not to launch a threatened missile attack on Guam.
Fed minutes in focus: Wednesday's main event is the release of minutes from the Federal Open Market Committee's July meeting, which are due at 2 p.m. Eastern Time. Investors will watch the minutes for any insight into when the Fed may next raise interest rates, how many rate hikes can be expected over the rest of 2017, and any commentary on inflation.
Traders on the federal-funds futures market have this week ramped up their bets for one more rate hike this year to above 50% (http://www.marketwatch.com/story/traders-lift-bets-on-one-more-rate-hike-this-year-up-above-50-2017-08-15), compared with 37.4% on Friday, according to CME Group data.
The shift in sentiment comes after better-than-expected data and Fed President Dudley's comments on Monday suggesting he would not rule out a rate hike for this year.
Stock movers:Target Corp. (TGT) rose 3.2% 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 19% 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 4.1% higher as one of the biggest percentage gainers among S&P 500 components.
Shares of Campbell Soup Co. (CPB) and 3M Co.(MMM) were both up 0.3% after chief executives of the two companies stepped down from President Donald Trump's manufacturing panel in protest over his remarks over the violence in Charlottesville, Va. The exodus comes as Trump tweeted that he is disbanding strategic and policy forum.
In other earnings on Wednesday, Cisco Systems Inc.(CSCO) and NetApp Inc. (NTAP) are scheduled to report after the market closes. Both stocks were higher in midday trading.
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 edged up 0.2% and the euro (http://www.marketwatch.com/story/dollar-steady-ahead-of-fed-minutes-pound-firms-after-jobless-data-2017-08-16) fell against the greenback after Reuters reported that European Central Bank President Mario Draghi won't deliver a fresh policy message at the Fed's Jackson Hole conference next week.
Oil prices (http://www.marketwatch.com/story/oil-prices-rise-on-hopes-for-another-big-drop-in-us-inventories-2017-08-16) slid 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. Gold was mostly flat.
--Sara Sjolin contributed to this report.
(END) Dow Jones Newswires
August 16, 2017 13:25 ET (17:25 GMT)