Stock prices were little changed on Wednesday as investors digested the minutes from the last meeting of the Federal Reserve Board and comments from Chairman Ben Bernanke.
The Dow Jones Industrial Average fell 8.68 points to 15,291.66. The Nasdaq Composite Index rose 16.50 points to 3520.76 and the S&P 500 stock index was up 0.30 points to 1652.62.
The U.S. Treasury auctioned $21 billion in 10-year notes with a yield of 2.67 percent, the highest yield since July 2011.
Oil prices rose again on concerns about the situation in Egypt and a significant drop in U.S. inventories. Crude closed at $106.27 a barrel, up $2.74 and the highest level since May 2012. Gold rose $1.50 to $1,247.40 an ounce.
Financial companies fell the most out of 10 S&P 500 groups as Bank of America Corp. (NYSE: BAC) and Wells Fargo & Co. (NYSE: WFC) slumped more than 1.2 percent. Nabors Industries Ltd. (NYSE: NBR) fell 6.3 percent after forecasting operating income below analysts’ estimates. Family Dollar Stores Inc. (NYSE: FDO) added 7.1 percent as the retailer’s earnings topped analyst estimates.
“The minutes largely reiterated what the chairman said in June,” said Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc. His firm oversees $290 billion.
“Tapering, whether it will be this year or next, is inevitable. The market was initially encouraged that the Fed is waiting on additional data, but possibly taken aback by the fact that about half the participants indicated that asset purchases should end later this year.”
Minutes from the central bank’s June 18-19 meeting, released Wednesday in Washington, showed that while several members judged that a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before they’ll begin slowing the pace of $85 billion in monthly bond purchases.
Fed officials met before last week’s Labor Department jobs report for the month of June exceeded expectations, with the economy adding 195,000 jobs and the unemployment rate unchanged at 7.6 percent.
The S&P 500 rallied 2.4 percent over the past four days as the June employment data eased concern over a scaling back of Fed stimulus. The index has recovered from a 4.8 percent drop from June 19 to 24, triggered when Chairman Bernanke said the central bank may reduce its bond-buying this year and end the program in 2014 as economic risks subside. The benchmark gauge is up 16 percent for the year, and within 1 percent of a record high set on May 21.
In China, a report from the General Administration of Customs in Beijing showed that exports fell 3.1 percent in June from a year earlier. The median estimate in a Bloomberg survey had called for a 3.7 percent gain.
Imports dropped 0.7 percent last month, compared with the median projection of a 6 percent increase. China’s trade surplus with the U.S. slipped to $17.49 billion in June from $19.35 billion in May.
Investors have also been watching corporate earnings. Alcoa Inc. (NYSE: AA) unofficially started the U.S. earnings season Monday with results that beat analysts’ estimates. JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo are among companies releasing results later this week.
The Chicago Board Options Exchange Volatility Index, or VIX, slid 1 percent to 14.21. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 31 percent since.
Nabors Industries fell to $14.99 after the company said it expects second-quarter operating income of $88 million to $91 million, below estimates of $110.1 million. The owner and operator of land drilling rigs cited adverse weather and intense competition, particularly for pressure pumping in the U.S. and Canada.
Best Buy Co. (NYSE: BBY) plunged 4.2 percent to $28.47. Cleveland Research Co. wrote in a report that a seasonal slowdown during the May-to-June period appears more pronounced this year for the world’s largest consumer-electronics retailer.
Health care, utility and technology shares rose the most among 10 S&P 500 groups, climbing at least 0.5 percent.
Hewlett-Packard (NYSE: HPQ) increased 1.8 percent, the most in the Dow, to $25.93. Citigroup upgraded its recommendation for the computer maker to “buy” from “sell” and doubled its price estimate for the shares to $32. A survey among chief information officers signaled a “positive inflection” for HP’s services, Citigroup analysts said.
Cisco Systems Inc. (Nasdaq: CSCO) gained 1 percent to $25.41, the highest level since May 2010, after surging 2.2 percent yesterday. Microsoft Corp. (Nasdaq: MSFT) advanced 1 percent to $34.70.
Family Dollar Stores jumped 7.1 percent to $68.50. The second-biggest U.S. dollar-store retailer reported fiscal third-quarter earnings of $1.05 a share, beating analyst estimates of $1.03 a share. Same-store sales climbed 2.9 percent as average transaction value and customer traffic increased for the quarter ended June 1.
Dollar General Corp. (NYSE: DG) increased 5.8 percent to $54.78. Dollar Tree Inc. (Nasdaq: DLTR) added 2.8 percent to $54.29.