Wall Street ends higher after Fed minutesComment on this story
New York - US stocks rose on Wednesday, rebounding from the previous day's broad selloff, after minutes of the Federal Reserve's last meeting showed central bankers have discussed the eventual tightening of monetary policy but made no decisions on which tools to use.
The Dow Jones industrial average rose 1 percent, its biggest daily percentage jump since mid-April. Goldman Sachs was the top gainer on the blue chip index, up 1.9 percent at $159.35.
Minutes of the Fed meeting showed the Fed staff presented several approaches to raising short-term interest rates, but said the discussion was simply “prudent planning” and not a sign rate hikes would come any time soon.
“The minutes are in line with what investors are thinking, which is that we see a rebound in growth but it is not to a point where the economy looks overly strong,” said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.
The Dow Jones industrial average rose 158.75 points or 0.97 percent, to 16,533.06, the S&P 500 gained 15.2 points or 0.81 percent, to 1,888.03 and the Nasdaq Composite added 34.65 points or 0.85 percent, to 4,131.54.
With the day's gain, the S&P 500 was up for a third session out of four. But the broad market index was still off about 1 percent from its record intraday high on May 13.
Retail stocks were once again in the spotlight. Tiffany & Company jumped 9.1 percent to $96.30 as one of the best performers on the S&P 500 after the jewellery retailer raised its full-year profit forecast. The S&P retail sector index was up 1.2 percent.
Target reported lower quarterly profit but showed signs of progress in efforts to rebuild customer confidence. The stock ended 1 percent higher at $57.20.
Despite a better-than-expected first-quarter earnings season, Bank of America-Merrill Lynch gave a cautious outlook on prospects for the rest of the year and 2015.
It forecast S&P 500 profit growth of 8 percent for both 2014 and 2015, below analyst consensus for both years. On average, analysts expect earnings to grow 9.1 percent this year and 11.4 percent in 2015, according to Thomson Reuters data.
About 96 percent of S&P 500 companies have reported results, with profit growth this quarter of 5.5 percent and revenue up 2.8 percent, according to Thomson Reuters. While more companies have topped earnings expectations than usual, fewer have beat on the revenue side.
About 5.2 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 6 billion. - Reuters