Economy
CLOSING BELL: August 22nd: DJIA: 13,172.76 | DOWN 30.82 | -0.23%
OIL: $97.33, UP 0.49, 0.50%
GOLD: $1,656.50, UP 13.60, +0.82%
GASOLINE (US Avg): $3.716, DOWN .001
S&P 500 closes flat after Fed minutes
Chuck Mikolajczak, Reuters – The S&P 500 erased earlier losses to close flat on Wednesday after minutes from the latest Federal Reserve meeting indicated the central bank might be ready for another round of stimulus.
Minutes from the July 31-August 1 meeting suggested the Fed is likely to deliver another round of monetary stimulus “fairly soon” unless the economy improves considerably.
The only question for markets is whether the recent improvement in economic data, which came after that meeting, will have convinced Fed Chairman Ben Bernanke that no action is necessary.
“The market is questioning if the improvement we’re seeing is substantial enough for Chairman Bernanke. He wants the (recently improving) economic data to translate into private- sector job creation,” said Quincy Krosby, market strategist at Prudential Financial, in Newark, New Jersey.
“The initial reaction from the markets is that it is sooner rather than later that the Fed will come in.”
Stocks had spent most of the session in negative territory after weak export data from Japan and caution over Greece’s meetings this week with European Union officials gave investors reasons to pull back after the recent rally.
Among the most actively traded U.S. stocks on Wednesday was Dell Inc (DELL.O), down 5.4 percent at $11.68 a day after the No. 2 U.S. PC maker warned of a challenging second half and slashed its full-year earningsoutlook. The NYSEArca computer hardware index .HWI lost 1 percent.
On Tuesday, the S&P 500 hit its highest level in more than four years, but failed to hold that peak, and the index closed in the red. However, the S&P’s steady move higher has lifted short-term support to the 1,400 level, although the index may need a positive catalyst to extend the rally.
The Jackson Hole, Wyoming, meeting of central bankers and economists at the end of the month is seen as possibly the next big market catalyst, followed by the European Central Bank’s September 6 meeting and the German constitutional court’s vote to ratify the euro zone’s rescue fund six days later.
The Dow Jones industrial average .DJI dropped 30.82 points, or 0.23 percent, to 13,172.76. The Standard & Poor’s 500 Index .SPX added 0.32 of a point, or 0.02 percent, to 1,413.49. The Nasdaq Composite Index .IXIC gained 6.41 points, or 0.21 percent, to 3,073.67.
Read the rest of this article at Reuters here.
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