Stocks Close Mostly Higher Following Volatile Trading Day - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Wednesday before ending the session mostly higher. The Dow and the S&P 500 both finished the day in positive territory, although the tech-heavy Nasdaq posted a modest loss.

While the Dow rose 59.54 points or 0.4 percent to 16,979.13, the S&P 500 moved within striking distance of a new record high by climbing 4.91 points or 0.3 percent to 1,986.51.

On the other hand, the Nasdaq edged down 1.03 points or less than a tenth of a percent to 4,526.48 after ending the previous session at a new fourteen-year closing high.

Stocks saw considerable volatility in afternoon trading following the release of the minutes of the Federal Reserve's monetary policy meeting in late July.

At the meeting, the Federal Open Market Committee voted 9-1 to maintain its current policy of very gradually withdrawing stimulus from the U.S. economy.

Fed forecasts show most officials don't expect to start raising rates until next year, but the minutes said some members are now making the case for a "relatively prompt" rate hike.

However, the majority of Fed voters think the central bank should be patient before hiking rates, as slack in the labor market remains a concern.

Peter Boockvar, managing director at the Lindsey Group, said, "There was nothing in the minutes that was going to tell us when rates would go up, but the tone was certainly a reminder that it may happen well before and to a higher level than many think sometime in 2015."

Among individual stocks, shares of Target (TGT) came under pressure at the start of trading but showed a substantial turnaround over the course of the session. After falling by as much as 1.7 percent, Target ended the day up by 1.8 percent.

The rebound by Target came even though the troubled retailer reported weaker than expected second quarter earnings and cut its full-year profit guidance.

Home improvement retailer Lowe's (LOW) also fell sharply at the open after lowering its forecast for full-year sales growth, but the stock subsequently rebounded. Shares of Lowe's rose by 1.6 percent.

On the other hand, shares of Hertz (HTZ) remained firmly in the red after an initial sell-off. The pullback came after the rental car company said it expects to be well below the low end of its 2014 guidance due to operational challenges.

Sector News

While most of the major sectors ended the day showing only modest moves, considerable strength was visible among telecom stocks. Reflecting the strength in the telecom sector, the NYSE Arca Telecom Index advanced by 1.2 percent.

Sprint (S) helped to lead the telecom sector higher, with the wireless provider climbing by 2 percent after ending the previous session at a nearly two-year closing low.

Airline stocks also saw notable strength on the day, driving the NYSE Arca Airline Index up by 1 percent. Strong gains by United Continental (UAL) and JetBlue (JBLU) helped lift the index to its best closing level in two months.

Railroad, defense, and semiconductor stocks also moved to the upside over the course of the session, while computer hardware and tobacco stocks saw some weakness.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region moved modestly higher during trading on Wednesday. Japan's Nikkei 225 Index closed just above the unchanged line, while Hong Kong's Hang Seng Index crept up by 0.2 percent.

Meanwhile, the major European markets gave back some ground following recent strength. While the German DAX Index edged down by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.

In the bond market, treasuries moved to downside following the release of the Fed minutes, ending the day modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 2.426 percent.

Looking Ahead

A batch of U.S. economic data may attract attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, existing home sales, and Philadelphia-area manufacturing activity.

Trading could also be impacted by reaction to earnings news from Hewlett-Packard (HPQ), as the tech giant is releasing its third quarter results after the close of today's trading.