MARKET SNAPSHOT: Stock Market Flirts With Records As Fed Minutes Strike Cautious Tone On Rates
December rate hike no longer seen as certainty
U.S. stock benchmarks were flirting with fresh records Wednesday as minutes from the Federal Reserve's September meeting indicated caution among policy makers on the next interest rate hike which the market had widely expected in December.
Several Fed officials indicated at last month's meeting that they believe it would be longer than previously thought to get inflation back to the central bank's 2% target. As such, many noted that "some patience" was warranted in hiking interest rates to assess trends in inflation.
The minutes reinforce the more circumspect tone from Fed speakers in recent days.
Read:December rate hike not automatic, minutes of last month's meeting show (http://www.marketwatch.com/story/december-rate-hike-not-automatic-minutes-of-last-months-meeting-show-2017-10-11)
What are stocks doing?
(http://www.marketwatch.com/story/us-stocks-on-track-to-resume-their-record-busting-rise-2017-10-09)The Dow Jones Industrial Average edged up 16 points to 22,847, notching an intraday record at 22,858.94, supported by gains in shares of Johnson & Johnson(JNJ). McDonald's Corp.(MCD) also rose more than 1% to help the blue-chip index extend gains.
The S&P 500 index inched up 1 point to 2,551 and the Nasdaq Composite Index gained 5 points to 6,592.
Read:Investors face 'extreme mental exhaustion' in markets where nothing is 'normal' (http://www.marketwatch.com/story/investors-face-extreme-mental-exhaustion-due-to-high-valuations-low-volatility-2017-10-10)
On Tuesday, the blue-chip Dow rose 0.3% to end at an all-time closing high of 22,830.68 (http://www.marketwatch.com/story/us-stock-futures-inch-higher-as-investors-count-down-to-earnings-season-2017-10-10). The S&P 500 added 0.2%, while the tech-heavy Nasdaq tacked on 0.1%, as those two gauges finished just below their record closes last week.
The Dow has gained nearly 16% for the year, the S&P is up 14%, and the Nasdaq has risen 22%.
What are strategists saying?
"The market continues to hold on to hopes of fiscal reform and another good earnings season," said Peter Cardillo, chief market economist at First Standard Financial.
Mike Loewengart, vice president of investment strategy at E-TRADE on the minutes: "What is telling about these minutes is the growing rift among Fed officials and the notion that a December hike is anything but guaranteed. We do know the Fed has a rate destination in mind, and a stated goal of three this year, but it still may be too early to tell if it will be this year or next."
What Fed officials are telegraphing to the markets:
Kansas City Fed President Esther George said Wednesday that waiting for inflation to hit the central bank's 2% target before further raising interest rates could be a mistake (http://www.marketwatch.com/story/feds-george-say-waiting-until-inflation-hits-2-to-raise-rates-would-be-mistake-2017-10-11) and lead to a possible overheating of the economy.
Chicago Fed President Charles Evans said one more rate-increase before the end of 2017 isn't set in stone, during a speech in Zurich. Wall Street is pricing in a nearly 90% chance of a rate increase by the end of the year according to CME Group data.
Economic data:
A report on U.S. job openings showed a fall to 6.08 million in August from 6.14 million.
See:Investors face 'extreme mental exhaustion' in markets where nothing is 'normal' (http://www.marketwatch.com/story/investors-face-extreme-mental-exhaustion-due-to-high-valuations-low-volatility-2017-10-10)
Which stocks are in focus?
Shares in BlackRock Inc.(BLK) rose 1.6% after the investment manager posted better-than-expected quarterly results (http://www.marketwatch.com/story/blackrocks-stock-rallies-after-profit-and-revenue-rise-above-expectations-2017-10-11).
Delta Air Lines Inc.'s stock (DAL) also gained 0.8% after the air carrier's results topped forecasts (http://www.marketwatch.com/story/delta-air-shares-surge-25-after-earnings-beat-estimates-2017-10-11).
Read more:Third-quarter earnings seen as 'an easy beat,' could set up more stock market records (http://www.marketwatch.com/story/third-quarter-earnings-seen-as-an-easy-beat-could-set-up-more-stock-market-records-2017-10-09)
Micron Technology Inc.'s stock (MU) fell 0.1% after the memory-chip company late Tuesday said it would sell about $1 billion (http://www.marketwatch.com/story/micron-to-sell-1-billion-in-fresh-shares-amid-memory-price-spike-stock-dips-2017-10-10) in new shares.
Barracuda Networks Inc.(CUDA) shares were down 13% after the cloud-computing company late Tuesday matched estimates for earnings (http://www.marketwatch.com/story/barracuda-shares-slump-even-as-revenue-billing-top-street-view-2017-10-10) and topped those for revenue and billings.
Alibaba Group Holding Ltd. shares (BABA) rose 0.7% after the Chinese e-commerce giant said it would nearly triple spending on cutting-edge research (http://www.marketwatch.com/story/alibaba-to-triple-investment-in-cutting-edge-research-to-15-billion-2017-10-11), as it tries to keep pace with Amazon.com Inc. (AMZN) and Alphabet Inc.(GOOGL).
What are other assets doing?
European stocks finished mixed, with Spain's IBEX gauge rallying as worries eased a bit about Catalonia's push for independence (http://www.marketwatch.com/story/spanish-stocks-rally-as-worries-over-catalan-independence-ease-2017-10-11). Catalan President Carles Puigdemont on Tuesday suspended the independence process (http://www.marketwatch.com/story/catalan-president-opts-for-spanish-dialogue-call-over-outright-independence-declaration-2017-10-10) for the region, but Spanish Prime Minister Mariano Rajoy on Wednesday fanned the flames in the conflict, suggesting he's edging toward suspending Catalonia's autonomy (http://www.marketwatch.com/story/dollar-slips-for-fourth-day-with-fed-minutes-in-focus-2017-10-11).
Asian markets closed with gains (http://www.marketwatch.com/story/asian-markets-flirt-with-milestones-as-monthlong-rally-continues-2017-10-10) as Japan's Nikkei benchmark scored its highest close in more than two decades (http://www.marketwatch.com/story/japans-nikkei-closes-at-highest-level-in-20-years-2017-10-11).
Oil futures climbed, while gold futures and a key dollar index pulled back.
--Victor Reklaitis contributed to this article.
(END) Dow Jones Newswires
October 11, 2017 14:46 ET (18:46 GMT)