Stock market struggles to extend records as investors await Fed's signal – MarketWatch

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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 reading 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 SPX, -0.19%  was trading flat at 2,440, with six of the 11 main sectors trading higher. Utilities and real estate shares were leading gains, up about 1%, while the financials and energy sectors were down about 0.9%.

The Dow Jones Industrial Average DJIA, -0.09% hit an intraday record at 21,354.56, but recently trading at break-even levels at 21,329. Gains in shares of Travelers Cos. Inc. TRV, +0.97%  and Johnson & Johnson JNJ, +0.63%  were offset by declines in Chevron Corp. CVX, -1.83%  and J.P. Morgan Chase & Co. JPM, -1.34%

The tech-heavy Nasdaq Composite Index COMP, -0.11% was up a slight 0.1%, or 6 points, at 6,226.

The consumer-price index, or cost of living, fell by a seasonally adjusted 0.1% in May, largely thanks to lower gasoline prices, which also depressed retails sales last month.

So-called haven assets rallied. The yield on the 10-year bond TMUBMUSD10Y, -4.68%  plunged 8 basis points to 2.13%, the lowest level since last November. The dollar fell 0.7% against the Japanese yen USDJPY, -0.99% trading at ¥109.30, while gold futures GCQ7, +0.87% jumped 0.7%, 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 and several people were injured after a gunman opened fire during a baseball practice. The suspect shooter is said to be in police custody.

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 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 on the market’s skepticism 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, +0.67%  traded 1% 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, and as billionaire investor and Tesla bull Ron Baron said the stock could rise by more than 50% by 2018.

H&R Block Inc. HRB, +10.41%  soared 10% after the tax preparer posted better-than-expected earnings late Tuesday.

Other markets: Oil futures CLN7, -3.38%  fell after the American Petroleum Institute said Tuesday that U.S. oil and gasoline stockpiles rose again last week. A report from the Energy Information Administration, due at 10:30 a.m. Eastern, will be watched for confirmation of the increase.

European stocks SXXP, -0.04% advanced, while Asian markets closed mixed.

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