MARKET SNAPSHOT: Stock Market Struggles To Extend Records As Investors Await Fed's Signals
Analyst: 'Market focus is on forward guidance, balance sheet reduction and what signals Janet Yellen gives'
U.S. stock-index benchmarks on Wednesday switched between small gains and losses as Wall Street equities attempted to extend trade into record territory ahead of the conclusion of the Federal Reserve's two-day policy meeting, which could offer clues about the pace of monetary tightening.
Disappointing readings on inflation and retail sales for May sparked a so-called flight to safety pushing bond yields and the dollar sharply lower.
The S&P 500 was last down 1 point at 2,439, with three of the 11 main sectors trading lower. Consumer-staples and utilities shares were leading gains, up a little less than 1%, while financials declined 0.9% and the energy (http://www.marketwatch.com/story/energy-sector-faces-worst-daily-drop-in-3-months-as-oil-prices-drop-2017-06-14)sector dropped 2%.
Oil futures (http://www.marketwatch.com/story/oil-prices-under-pressure-on-worries-data-will-confirm-rising-us-stockpiles-2017-06-14) fell more than 3% after the American Petroleum Institute said Tuesday that U.S. oil and gasoline stockpiles rose again last week and a report from the Energy Information Administration showed a smaller-than-expected decline in crude supplies and an increase in gasoline supplies and crude production.
The Dow Jones Industrial Average hit an intraday record at 21,354.56, and recently traded up 12 points at 21,340. Gains in shares of Home Depot Inc.(HD), Boeing Co.(BA) and General Electric Co.(GE) were offset by declines in Chevron Corp. (CVX), Exxon Mobil Corp.(XOM) and J.P. Morgan Chase & Co. (JPM).
The tech-heavy Nasdaq Composite Index was up 4 points at 6,223.
The consumer-price index (http://www.marketwatch.com/story/inflation-falls-again-in-may-as-cpi-recedes-from-recent-high-water-mark-2017-06-14), or cost of living, fell by a seasonally adjusted 0.1% in May, largely thanks to lower gasoline prices, which also depressed retails sales (http://www.marketwatch.com/story/us-retail-sales-in-may-are-weakest-in-16-months-2017-06-14)last month.
So-called haven assets rallied. The yield on the 10-year bond , which moves inversely to prices, plunged 10 basis points to 2.112%, the lowest level since last November, while the yield on the 2-year Treasury was on track for its largest post-Brexit one-day drop (http://www.marketwatch.com/story/2-year-treasury-note-on-pace-for-sharpest-daily-yield-drop-since-brexit-2017-06-14). The dollar fell 0.5% against major currencies, while gold futures (http://www.marketwatch.com/story/gold-turns-higher-as-soft-economic-reports-raise-doubts-about-fed-moves-after-wednesday-2017-06-14) jumped 0.6%, on pace to snap a five-session skid.
Shannon Saccocia, head of asset allocation & portfolio strategy at Boston Private, said softer data are consistent with recent trend of weakness but unlikely to change the Federal Reserve's well-telegraphed plan to raise interest rates today.
"The market can absorb three rates hikes this year, though the Fed might pause in raising rates after this patch of soft economic data," Saccocia said. Wall Street is widely expecting the Fed to lift rates by a quarter-point Wednesday, with the next opportunity to lift rates again coming in September.
Earlier, stock futures largely shrugged off news of shooting in Northern Virginia, where House Majority Whip Steve Scalise (http://www.marketwatch.com/story/house-majority-whip-scalise-shot-at-congressional-baseball-practice-2017-06-14) and several people were injured after a gunman opened fire during a baseball practice. The suspected shooter died from his injuries.
Saccocia said the market may continue to ignore the shooting unless it turns out to be an organized plan involving more than just a lone shooter.
Wall Street is focused on what Fed chief Janet Yellen (http://blogs.marketwatch.com/capitolreport/2017/06/14/fed-interest-rate-decision-and-janet-yellen-press-conference-live-blog-and-video/) and her colleagues say about the timing of subsequent hikes and her news conference set for 2:30 p.m. Eastern, half-hour after the updated policy statement is released. The chairwoman is expected to push back hard (http://www.marketwatch.com/story/yellen-may-be-forceful-in-press-conference-when-defending-feds-interest-rate-path-2017-06-13) on the market's skepticism (http://www.marketwatch.com/story/heres-what-the-market-thinks-the-fed-has-got-wrong-2017-06-13) about the need for another rate increase this year.
A rate increase on Wednesday is a sure thing, "so the market focus is on forward guidance, balance sheet reduction and what signals Janet Yellen gives in her press conference," said Neil Wilson, senior market analyst at ETX Capital, in a note.
Individual movers: Shares in Tesla Inc.(TSLA) traded 1.5% higher after the maker of electric cars scored another record close Tuesday.
The jump came amid news that Tesla's Model X SUV snagged a five-star safety rating (http://www.marketwatch.com/story/teslas-model-x-gets-5-star-safety-rating-from-nhtsa-2017-06-13), and as billionaire investor and Tesla bull Ron Baron said the stock could rise by more than 50% by 2018 (http://www.marketwatch.com/story/billionaire-predicts-blue-chips-to-double-by-2030-and-tesla-shares-to-do-even-better-2017-06-13).
Oil-related stocks were among the worst performers on the S&P 500 with shares of Transocean Ltd.(RIG) down 6.7%, Murphy Oil Corp.(MUR) shares down 5.4%, and shares of National Oilwell Varco Inc.(NOV) down 5.3%.
United Parcel Service Inc.(UPS) shares declined 0.3%, amid reports that multiple people were shot at a facility in San Francisco (http://www.marketwatch.com/story/multiple-people-shot-at-ups-facility-in-san-francisco-shooter-neutralized-reports-2017-06-14).
H&R Block Inc.(HRB) soared 9% after the tax preparer posted better-than-expected earnings (http://www.marketwatch.com/story/hr-block-shares-rally-after-company-beats-eps-sales-expectations-2017-06-13) late Tuesday.
Alexion Pharmaceuticals Inc. (ALXN) shares rallied 8.2% after the drugmaker late Tuesday named as its chief financial officer Paul Clancy (http://www.marketwatch.com/story/alexion-hires-biogen-executive-to-serve-as-its-cfo-2017-06-13), formerly of Biogen Inc.(BIIB) Biogen shares were down 3.1%.
Other markets:European stocks (http://www.marketwatch.com/story/european-stocks-log-gains-with-support-from-tech-sector-fed-outlook-2017-06-14) slipped, while Asian markets (http://www.marketwatch.com/story/asian-markets-gain-as-tech-stocks-bounce-back-2017-06-13) closed mixed.
--Victor Reklaitis in London contributed to this article.
(END) Dow Jones Newswires
June 14, 2017 13:34 ET (17:34 GMT)