S&P 500 hits record high close following Fed minutes

U.S. stocks ended up slightly on Wednesday, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve's latest meeting showed policymakers view a rate hike coming soon.

But, according to the May 2-3 meeting minutes, they also agreed they should hold off on raising interest rates until they knew a recent U.S. economic slowdown was temporary.

Stocks were volatile following the minutes' release, but eventually added to small earlier gains. The S&P financial index , which fell right after the minutes came out, rebounded to end down just 0.04 percent. Banks tend to benefit from higher borrowing rates.

"Absent a material slowdown in the economy, Federal Reserve officials, acknowledging support from strengthening global growth, appear poised to stay on track toward interest rate normalization," said Quincy Krosby, chief market strategist at Prudential Financial, based in Newark, New Jersey.

The Dow Jones Industrial Average was up 74.51 points, or 0.36 percent, to 21,012.42, the S&P 500 gained 5.97 points, or 0.25 percent, to 2,404.39 and the Nasdaq Composite added 24.31 points, or 0.40 percent, to 6,163.02.

It was also a fifth straight day of gains for the S&P 500.

Following the Fed minutes' release, traders scaled back bets on two more rate increases by the end of 2017.

Federal funds futures implied traders saw about a 46 percent chance the U.S. central bank would raise rates twice more by year-end, down from roughly 50 percent late on Tuesday, according to CME Group's FedWatch program.

Fed policymakers also discussed at length the reasons for the first-quarter slowdown. While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen.

"One thing that struck me a bit was that they registered confidence in the consumer was pretty healthy, and that's significant," said Michael Purves, chief global strategist at Weeden & Co.

Among the day's gainers, Intuit jumped 6.7 percent after the tax-preparation software maker posted a profit topped estimates and also raised its revenue forecast.

The retail sector issued more results that disappointed.

Lowe's dropped 3 percent after the home improvement chain reported a lower-than-expected profit and comparable sales.

Jewelry retailer Tiffany sank 8.7 percent after posting a surprise drop in comparable sales. Signet Jewelers , which reports on Thursday, was down 7.2 percent. The two were the biggest losers on the S&P.

About 6.1 billion shares changed hands on U.S. exchanges, below the 6.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 99 new highs and 57 new lows.

(By Caroline Valetkevitch; Additional reporting by Tanya Agrawal in Bengaluru and Megan Davies in New York; Editing by Savio D'Souza and Nick Zieminski)