Shares of Nike and Travelers led the rise for Dow
U.S. stocks finished in a mixed mode but mostly higher on Wednesday, 12 October 2016 after minutes from the Federal Reserve's September policy meeting showed support for a rate rise relatively soon but implied a go-slow approach. Rising bond yields and a strengthening dollar remained focal points in today's action as investors looked to substantiate their rate hike outlook with the minutes from the FOMC's September 20-21 meeting.
The Dow Jones Industrial Average closed up 15.54 points, or 0.1%, at 18,144.20. The S&P 500 index advanced 2.44 points, or 0.1%, to finish at 2,139.17. The Nasdaq Composite Index finished lower on the session, declining 7.77 points, or 0.2%, to close at 5,239.02, pressured by a slide in the biotech sector.
Shares of Nike and Travelers led the rise. Eight sectors finished in positive territory while three - health care, energy and materials ended the day with a loss. The S&P was led higher by the real estate, utilities and telecom sectors.
The minutes from the FOMC's September policy meeting indicated that there were a number of arguments for raising rates in September, but that the committee opted to wait for further data. All in all, there wasn't really any "new" news in the minutes, which essentially reinforced preconceived policy notions held by the market ahead of their release. Those notions revolved around a belief that the next hike in the target range for the fed funds rate will most likely occur at the December 13-14 FOMC meeting, barring any big economic potholes hit along the way. The next Fed meeting is scheduled for Nov. 1-2.
The dollar index moved 0.3% higher today.
Today's economic data at Wall Street included the weekly MBA Mortgage Index and the Job Openings and Labor Turnover Survey for August 2016. The MBA Mortgage Index indicated that mortgage applications fell 6.0% in the week ending 8 October 2016. This followed a 2.9% increase in the prior week. The August Job Openings and Labor Turnover Survey showed that job openings came in at 5.443 million from a revised 5.831 million (from 5.871 million) in July.
Crude oil futures fell on Wednesday, 12 Octobeer 2016 at Nymex as uncertainty over Russia's willingness to cut production and a monthly rise in output from OPEC members sent prices lower for a second session in a row.
On the New York Mercantile Exchange, November West Texas Intermediate crude fell 61 cents, or 1.2%, to settle at $50.18 a barrel after losing 1.1% a day earlier. December Brent crude on London's ICE Futures exchange lost 60 cents, or 1.1%, to $51.81 a barrel.
Lack of a clear commitment by Russia to slash production is exacerbating investors' doubts whether or not the preliminary agreement OPEC members reached in late September to cut output by 200,000 to 700,000 barrels a day will be implemented. A condition of the cut is the understanding that Russia would be on board.
Bullion prices settled lower on Wednesday, 12 October 2016 at Comex. Gold futures settled lower pressured by modest gains in the dollar, but prices headed higher in electronic trade after the Federal Reserve released minutes from its September meeting. The minutes, which were released after gold futures settled for the session, showed that officials from the central bank held off raising interest rates in September even though they said there was a reasonable argument for an increase.
December gold settled at $1,253.80 an ounce, down $2.10, or 0.2%, for the session. It traded up at $1,257 an ounce in electronic trading about a half-hour after the FOMC minutes. Prices, however, had seesawed above and below the settlement level in the immediate wake of the release. December silver settled little-changed at $17.505 an ounce. December copper ended at $2.177 a pound, down just under a penny, or 0.4%.
Today's trading volume fell came in below the recent averages of 926 million as 655 million shares changed hands at the NYSE floor.
Tomorrow's economic data will include weekly initial claims report (consensus 255k) and the Import/Export Price report for September, both of which will cross the wires at 8:30 a.m. ET. Separately, the Treasury Budget for September will be released at 2:00 p.m. ET.
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