Nasdaq up, but Dow, S&P turn flat before FOMC minutes

Nasdaq up, but Dow, S&P turn flat before FOMC minutes
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First Published: Wed, Jul 14 2010. 11 42 PM IST
Updated: Wed, Jul 14 2010. 11 42 PM IST
New York: Tech shares led the Nasdaq higher on Wednesday after Intel’s strong results, but the Dow and S&P sharply trimmed gains on tepid retail sales figures and ahead of the release of the minutes from the Fed’s most recent meeting.
Intel Corp reported better-than-expected second-quarter earnings and revenue late on Tuesday, soothing concerns about weakness in tech spending. The stock, a Dow component, rose 3.5% to $21.74.
But weak retail sales tempered enthusiasm ahead of the minutes from the Federal Open Market Committee’s June meeting, due for release at 1800 GMT. Investors are looking to see how the Fed views recent economic weakness after a spate of worrisome data.
“I think what we’ve seen so far is pretty much going to dictate what happens the rest of the day — not a lot of movement,” said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis.
On 23 June, at the end of its two-day meeting, the Fed renewed its pledge to keep benchmark interest rates near zero for an extended period and noted pockets of weakness in the economy.
Investors closely watch retail sales data for insight into consumer spending as worries about the economic recovery’s pace have hurt the stock market in recent weeks.
“The consumer can be very fickle and very subject to short-term fears,” said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York. “It continues to be corporations ... that are driving the economic recovery.”
The Dow Jones industrial average gained 6.81 points, or 0.07%, to 10,369.83, well below its session high at 10,400.10. The Standard & Poor’s 500 Index added 0.46 of a point, or 0.04%, to 1,095.80. The Nasdaq Composite Index climbed 12.26 points, or 0.55%, to 2,254.29.
Earlier, the S&P 500 touched an intraday high at 1,099.08.
Chipmakers led the technology sector, with Nvidia Corp up 1.3% at $11.06. Qualcomm Inc added 2.3% to $36.77.
An S&P index of retail stocks shed 0.6%. The Commerce Department reported that US retailers’ June sales declined 0.5%. That was more than twice the 0.2% drop forecast by economists polled by Reuters.
Bank stocks largely fell on renewed concerns about European banks’ stress test results. The KBW Bank Index lost 1.7%.
Fast-food chain operator Yum Brands Inc gave a full-year profit outlook late on Tuesday that was below expectations. The stock was down 0.50 of a point at $41.00.
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First Published: Wed, Jul 14 2010. 11 42 PM IST
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