U.S. stocks ended a volatile session with modest gains on Wednesday after minutes from a U.S. Federal Reserve meeting indicated that the central bank remained on track for a interest rate hike this year.
Major indexes moved between negative territory and session highs after the news as traders parsed the minutes for clues as to when the first rise could occur. Some Fed participants went on record saying they expected upcoming economic data would warrant an initial rate increase in June, while others anticipated a hike later in 2015 due to recent strength in the U.S. dollar.
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Market participants had been expecting the first rate hike to come in September or later, with last week's much weaker-than-expected March payroll report pointing to slowing growth. The central bank has said it would only raise rates when data suggests the economy is strong enough to withstand it.
"June would come as a surprise," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta, Georgia. "If the Fed moves monetary policy in an arbitrarily fast manner, that would be a detriment for stocks."
Fed officials acknowledged risks from overseas and a weak start to the year at their March meeting but remained confident in the strength of the recovery, the minutes showed.
Markets were supported boosted by merger activity in the healthcare sector, though the energy sector was weak as crude oil plunged.
Mylan jumped 14.8 percent to $68.36 after the generic drugmaker offered to buy Perrigo Co for about $29 billion in cash and stock. Perrigo jumped 18.4 percent to $195. The two companies were the biggest percentage gainers on the S&P 500.
U.S. crude futures dropped 6.6 percent to settle at $50.42 a barrel after U.S. Energy Information Administration data showed the largest weekly build in oil inventories since March 2001. The news offset Royal Dutch Shell's $70 billion bid for rival BG Group.
The S&P Energy index fell 1 percent while Exxon Mobil lost 2 percent to $84.06 and Chevron Corp shed 1.7 percent to $106.66.
The Dow Jones industrial average rose 27.09 points, or 0.15 percent, to 17,902.51, the S&P 500 gained 5.57 points, or 0.27 percent, to 2,081.9 and the Nasdaq Composite added 40.59 points, or 0.83 percent, to 4,950.82.
After the market closed, Alcoa Inc reported first-quarter revenue that was below expectations. The stock, which is viewed as the unofficial kick-off to the earnings season, was flat in extended trading.
Advancing issues outnumbered declining ones on the NYSE by 1,847 to 1,163, for a 1.59-to-1 ratio on the upside; on the Nasdaq, 1,739 issues rose and 979 fell for a 1.78-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 12 new 52-week highs and no new lows; the Nasdaq Composite was recording 79 new highs and 29 new lows.
About 5.68 billion shares traded on all U.S. platforms, according to BATS exchange data, below the month-to-date average of 6.25 billion.
(By Ryan Vlastelica; Editing by Meredith Mazzilli)