Major Averages Edge Up To New Record Closing Highs - U.S. Commentary

(RTTNews) - Stocks turned in another relatively lackluster performance during trading on Wednesday but managed to end the session modestly higher. With the gains on the day, the major averages climbed to new record closing highs.

The major averages ended the session at their best levels of the day. The Dow edged up 42.21 points or 0.2 percent to 22,872.89, the Nasdaq rose 16.30 points or 0.3 percent to 6,603.55 and the S&P 500 crept up 4.60 points or 0.2 percent to 2,555.24.

The modestly higher close on Wall Street came following the release of the minutes of the Federal Reserve's latest monetary policy meeting.

The minutes of the Fed's September meeting said many participants expressed concern that the low inflation readings this year might reflect not only transitory factors but also the influence of developments that could prove more persistent.

"A few of these participants thought that no further increases in the federal funds rate were called for in the near term or that the upward trajectory of the federal funds rate might appropriately be quite shallow," the Fed said.

The central bank added, "Some other participants, however, were more worried about upside risks to inflation arising from a labor market that had already reached full employment and was projected to tighten further."

The Fed subsequently said many participants thought that another increase in interest rates later this year is likely to be warranted if the medium-term outlook remained broadly unchanged.

"In short, the majority of Fed officials are worried that core inflation might not rebound quickly, but that isn't going to stop them from continuing to normalize interest rates, particularly not when the unemployment rate is getting so low," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, "A few wanted to delay the next rate hike until there were clear signs of a rebound in core inflation, but most were content to simply wait for the next few inflation reports."

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Railroad, semiconductor, and internet stocks saw some strength, contributing to the higher close by the major averages.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index edged up by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index crept up by 0.2, the U.K.'s FTSE 100 Index dipped by 0.1 percent and the French CAC 40 Index closed just below the unchanged line.

In the bond market, treasuries showed a lack of direction throughout the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 2.345 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and producer price inflation.

Earnings news from financial giants Citigroup (C) and JPMorgan Chase (JPM) is also likely to be in focus on the day.