Rudd’s MarketView


The major domestic equity indexes ended the trading day up slightly on Wednesday, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve’s latest meeting showed policymakers view a rate hike coming soon. However, according to the May 2-3 meeting minutes, they also agreed they should hold off on raising interest rates until they knew a recent U.S. economic slowdown was temporary.

Stocks were volatile following the minutes’ release, but eventually added to small earlier gains. The S&P financial index, which fell right after the minutes came out, rebounded to end down just 0.04 percent. Banks tend to benefit from higher borrowing rates. It was also a fifth straight day of gains for the S&P 500.

Following the Fed minutes’ release, traders scaled back bets on two more rate increases by the end of 2017. Federal funds futures implied traders saw about a 46 percent chance the Fed would raise rates twice more by year-end, down from roughly 50 percent late on Tuesday, according to CME Group’s FedWatch program.

Fed policymakers also discussed at length the reasons for the first-quarter slowdown. While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen.

Among the day’s gainers, Intuit rose 6.7 percent after the tax-preparation software maker posted a profit topped estimates and also raised its revenue forecast.

At the same time, the retail sector issued more results that disappointed.

Lowe’s fell 3 percent after the home improvement chain reported a lower-than-expected profit and comparable sales.

Tiffany saw its shares closed down 8.7 percent after the jewelry chain posted a surprise decline in comparable sales. Signet Jewelers, which reports on Thursday, was down 7.2 percent. The two were the largest losers on the S&P.

Approximately 6.1 billion shares changed hands on the major domestic equity exchanges, a number that was below the 6.8 billion share daily average for the past 20 trading days, according to Thomson Reuters data.

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