Market Wrap: Stocks End Nearly Flat; Fed Minutes Limit Drop

Dow Jones Index Crosses 18,000 Mark

NEW YORK — The Dow and S&P 500 ended barely lower Wednesday after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers are concerned about raising interest rates too soon.

Exxon Mobil (XOM), which fell 2.2 percent to $91.01, was the biggest drag on both the S&P 500 and Dow following an explosion and fire at an Exxon refinery near Los Angeles and a drop in crude oil prices. Also, Berkshire Hathaway (BRK-A) (BRK-B) disclosed shedding a $3.74 billion investment in Exxon.

The S&P 500 was down 1.5 percent, with U.S. crude oil falling 2.6 percent to settle at $52.14 a barrel.

The minutes reflect our view that while the economy is growing, an interest rate liftoff is not a slam dunk at this point.

Fed policymakers expressed concern last month that raising interest rates too soon could pour cold water on the U.S. economic recovery, according to minutes from the Fed’s Jan. 27-28 meeting.

“The minutes reflect our view that while the economy is growing, an interest rate liftoff is not a slam dunk at this point,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta.

“Clearly, there are some more dovish members that feel the economy is still not strong enough to support steady pricing, so that is holding the Fed back from normalizing policy.”

Stocks generally have risen with any sign the Fed could raise rates later rather than sooner.

An index of S&P 500 utilities, which tend to do well in a low interest-rate environment, jumped 2.4 percent and was the biggest positive in the S&P 500 as bond yields declined. S&P financial shares, which tend to benefit from a higher rate environment, declined 0.7 percent.

The Dow Jones industrial average (^DJI) fell 17.73 points, or 0.1 percent, to 18,029.85, the Standard & Poor’s 500 index (^GSPC) lost 0.66 points, or 0.03 percent, to 2,099.68 and the Nasdaq composite (^IXIC) added 7.10 points, or 0.14 percent, to 4,906.36.

The day’s move breaks a two-session string of record closing highs for the S&P 500.

Other Factors

Investors also weighed developments involving Greece. The European Central Bank agreed a modest increase in emergency funding for Greek banks, putting pressure on Athens to strike a financing deal with its European partners before its lenders run out of money.

Fossil Group (FOSL) shares sank 15.7 percent to $83.69 after the fashion accessory-maker reported quarterly earnings and revenue below expectations.

Also on the earnings front, Garmin (GRMN) fell 10.7 percent to $50.71 after the navigation device-maker gave an earnings outlook below estimates.

About 6 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the month so far, according to BATS Global Markets.

Advancing issues outnumbered declining ones on the NYSE by 1,662 to 1,403, for a 1.18-to-1 ratio on the upside; on the Nasdaq, 1,429 issues rose and 1,303 fell for a 1.10-to-1 ratio favoring advancers.

The S&P 500 posted 58 new 52-week highs and two new lows; the Nasdaq composite recorded 83 new highs and 26 new lows.

With additional reporting by Sam Forgione.

What to watch Thursday:

  • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
  • At 10 a.m., the Federal Reserve Bank of Philadelphia releases its survey of manufacturing conditions in the Mid-Atlantic region; the Conference Board releases leading indicators for January; and Freddie Mac releases weekly mortgage rates.

Earnings Calendar
These selected companies are scheduled to release quarterly financial results:

  • Bloomin Brands (BLMN)
  • Boise Cascade (BCC)
  • Cedar Fair (FUN)
  • Hormel Foods (HRL)
  • Imax (IMAX)
  • Mohawk Industries (MHK)
  • Newmont Mining (NEM)
  • Noodles & Co. (NDLS)
  • Nordstrom (JWN)
  • (PCLN)
  • Six Flags Entertainment (SIX)
  • Walmart Stores (WMT)

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