Wall Street rises in volatile trading after Fed minutes

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stocks rose on Wednesday, but trading was volatile following the release of minutes from the U.S. Federal Reserve that indicated the central bank remained on track for a rate hike this year.

Major indexes initially fell after the release, as several Fed participants went on record saying they expected upcoming economic data would warrant an initial rate increase in June, which would be sooner than currently expected. Other participants anticipate a hike later in 2015 due to recent strength in the U.S. dollar.

Market participants had been expecting the first rate hike to come in September or later, with the March payroll report, which came in sharply under expectations last week, 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.

 

"Recent comments suggested that the Fed was moving more towards September or later, based off some softer economic reports. 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 had been positive prior to the minutes, boosted by merger activity in the healthcare sector, though the energy sector was weak as crude oil plunged.

Mylan jumped 17 percent to $69.94 after the generic drugmaker offered to buy Perrigo Co for about $29 billion in cash and stock. Perrigo jumped 20 percent to $197.75. The two companies were the biggest gainers on the S&P 500.

U.S. crude futures dropped 6.3 percent 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 <.SPNY> fell 0.7 percent while Exxon Mobil lost 1.5 percent to $84.44 and Chevron Corp shed 1.5 percent to $106.86.

The Dow Jones industrial average <.DJI> rose 34.2 points, or 0.19 percent, to 17,909.62, the S&P 500 <.SPX> gained 5.9 points, or 0.28 percent, to 2,082.23 and the Nasdaq Composite <.IXIC> added 37.68 points, or 0.77 percent, to 4,947.91.

Advancing issues outnumbered declining ones on the NYSE by 1,888 to 1,093, for a 1.73-to-1 ratio on the upside; on the Nasdaq, 1,727 issues rose and 958 fell for a 1.80-to-1 ratio favouring advancers.

The benchmark S&P 500 index was posting 12 new 52-week highs and no new lows; the Nasdaq Composite was recording 67 new highs and 25 new lows.

(Editing by Meredith Mazzilli)