Stocks Close Roughly Flat Following Fed Minutes - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout the day leading up to the release of the minutes of the Federal Reserve's latest monetary policy, stocks continued to turn in a lackluster performance following the release of the minutes.

The major averages eventually ended the day on opposite sides of the unchanged line. While the Nasdaq edged down 7.77 points or 0.2 percent to 5,239.02, the Dow crept up 15.54 points or 0.1 percent to 18,144.20 and the S&P 500 inched up 2.45 points or 0.1 percent to 2,139.18.

The roughly flat close on Wall Street came as the minutes of last month's monetary policy meeting revealed that members of the Fed were divided regarding the timing of further interest rate hikes.

While three Fed officials voted to raise rates by a quarter point, several others said the eventual decision to leave rates unchanged was a "close call."

The Fed said a reasonable argument could be made either for an increase at the September meeting or for waiting for some additional information on the labor market and inflation.

Members generally agreed that the case for a rate hike had strengthened, but a majority determined that the Fed should wait for further evidence of progress toward its objectives.

The central bank is widely expected to leave rates unchanged at its November meeting due to the impending presidential election, but a rate hike in December remains on the table.

Among individual stocks, shares of Fortinet (FTNT) saw a steep decline after the cybersecurity company lowered its guidance for third quarter earnings and revenues.

Health insurer Humana (HUM) also came under pressure a report showed a decline in government ratings of plans the company offers under Medicare.

On the other hand, shares of Voxx International (VOXX) moved sharply higher after the consumer electronics company reported a second quarter profit compared to a year-ago loss.

Sector News

Many of the major sectors ended the day showing only modest moves, although substantial weakness was visible among biotechnology stocks. The NYSE Arca Biotechnology Index plunged by 2.9 percent to a three-month closing low.

Novavax (NVAX), Juno Therapeutics (JUNO), and Agios Pharmaceuticals (AGIO) turned in some of the biotech sector's worst performances.

Significant weakness was also visible among networking stocks, as reflected by the 1.6 percent loss posted by the NYSE Arca Networking Index. The index fell to its lowest closing level in almost a month.

The weakness in the networking sector came after Ericsson (ERIC) warned its third quarter results will be significantly lower than expectations. Shares of Ericsson plunged by 20.8 percent.

Oil service stocks also saw notable weakness amid a continued pullback by the price of crude oil, while gold stocks regained some ground following a recent drop.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.1 percent, while Hong Kong's Hang Seng Index dropped by 0.6 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the German DAX Index and the French CAC 40 Index fell by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries climbed off their lows of the session but still closed in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.9 basis points to 1.778 percent.

Looking Ahead

Trading on Thursday could be impacted by reports on weekly jobless claims and import and export prices, although traders may look ahead to more closely watched reports on producer prices and retail sales due on Friday.