Officials were concerned about weaker economic growth during the first quarter.
U.S. stocks ended Wednesday's choppy session slightly lower, on Wednesday, 20 May 2015 as modest post-Fed-minutes gains evaporated by the close of the trading day. Widely anticipated minutes from the Federal Reserve's most recent meeting revealed a rate hike in June is 'unlikely' as officials were concerned about weaker economic growth during the first quarter.
Equity indices spent the first half of today's session near their flat lines with the S&P 500 maintaining a seven-point range that was violated to the upside during afternoon action once the Federal Open Market Committee released the minutes from its April policy meeting. The index could not hold its afternoon gain and returned to the flat line by the close.
The Dow Jones Industrial Average ended down 26.99 points, or 0.2%, at 18,285.40, a day after registering record highs Monday and Tuesday. Breaking from the pack, the Nasdaq Composite closed 1.71 points higher at 5,071.74. The S&P 500 closed down 1.98 points, off 0.1%, at 2,125.85.
Five sectors ended in the green with three countercyclical groups showing relative strength throughout the day. Rate-sensitive telecom services, and utilities benefitted from lower rates while the health care sector was underpinned by biotechnology.
The April minutes of the policy-setting FOMC were released shortly after the close of regular metals trading on Comex. Only a few Fed officials thought economic data would improve enough to trigger a rate hike at the next meeting in June. The latest FOMC meeting minutes revealed the majority of committee members do not want to raise interest rates in June. The minutes also suggested the Fed will continue to be data-dependent and that the price weakness of the first quarter was transitory. Recent U.S. economic data has been a mixed bag and has provided no solid clues on when the FOMC might make an interest-rate hike.
The feature in the market place so far this week has been the resurgent U.S. dollar index. The index is a basket of six major world currencies weighted against the greenback. Many raw commodity markets, including the precious metals, have been hit hard this week, mainly due to the appreciation of the dollar.
Reports overnight said there is progress being made in the Greece-EU/IMF debt restructuring talks. The existing bailout deal expires in June. The reports said Greece will run out of cash in June without a new cash infusion from its EU-IMF creditors. Despite the progress reportedly being made, this is a big, messy situation that will continue to cause major problems for the European Union. This is a major underlying bearish factor for the Euro currency.
The Bank of England's minutes of the latest monetary policy meeting, released Wednesday, showed the BOE reckoned U.K. economic growth will accelerate in the second quarter, following a slow start to the first quarter.
Investors read the minutes as confirmation of expectations that a rate hike won't arrive until later this year, briefly sending all three main indexes into record-high territory.
Bullion prices settled higher on Wednesday, 20 May 2015 at Comex. Prices moved up after minutes from the Federal Reserve Open Market Committee's April meeting showed that only a few officials expect an interest-rate hike in June. Gold for June delivery settled at $1,208.70 an ounce, up $2, or 0.2%, on Comex. July silvergained 4.2 cents, or 0.3%, to end at $17.113 an ounce.
Crude-oil futures erased early losses and moved higher on Wednesday, 20 May 2015 at Nymex as markets weighed stronger Chinese manufacturing data and a further decline in U.S. oil storage levels.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $59.15 a barrel, up $0.17 in the Globex electronic session.
Oil prices gained after the EIA's data showed that U.S. commercial crude-oil inventories fell by 2.7 million barrels in the week ended 15 May 2015.
Today's participation was comparable to totals observed earlier in the week with fewer than 700 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which fell 1.5% to follow last week's 3.5% decline.
Tomorrow, weekly Initial Claims ( consensus 270K) will be released at 8:30 ET while April Existing Home Sales (consensus 5.24 million), April Leading Indicators (expected 0.3%), and May Philadelphia Fed Survey (expected 8.0) will cross the wires at 10:00 ET.
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