Wall Street posts modest loss after Fed minutes

The indexes were all well into the red all day, particularly in the morning when the Dow was down almost 200, then zoomed up to within 40 points of breakeven before diving again shortly before noon. That must have been when the Fed minutes were released showing a continued commitment to more hikes and almost certainly another hike this month. Basically it’s wait-and-see as more reports come in, particularly the jobs report on Friday. As today’s expert put it, “Since the Fed is data dependent, so is the market.”  

The good news is that new U.S. orders increased less showing inflation getting tamed. The bad news is that new orders increased less, stoking fears of an economic slowdown. The bad news is that megastocks are pulling back, the good news that smaller stocks are catching up. Volume remains below average at 10.3 billion. 

Wall Street posts modest loss after Fed minutes

By Lewis Krauskopf, Bansari Mayur Kamdar and Johann M Cherian

Wed July 5, 2023  4:19 PM

DJ: 34,418.47  +10.87         NAS: 13,816.77  +28.85        S&P: 4,455.59  +5.21       7/3

DJ: 34,288.64  -129.83        NAS: 13,791.65  -25.12         S&P: 4,446.82  -8.77        7/5

July 5 (Reuters) - Wall Street's main indexes ended with modest declines on Wednesday as investors digested minutes from the U.S. Federal Reserve's latest meeting and braced for significant economic data in the days to come.  Minutes showed a united Fed agreed to hold interest rates steady at the June meeting as a way to buy time and assess whether further rate hikes would be needed.  Following the release of the anticipated minutes, investors still largely expected the central bank to raise rates at its next meeting later this month. Key economic data is due before the meeting, including the monthly U.S. jobs report on Friday.  “The markets are in a wait-and-see for the economic data,” said Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest Wealth Management. “Since the Fed is data dependent, so is the market.”

The Dow Jones Industrial Average (.DJI) fell 129.83 points, or 0.38%, to 34,288.64, the S&P 500 (.SPX) lost 8.77 points, or 0.20%, to 4,446.82 and the Nasdaq Composite (.IXIC) dropped 25.12 points, or 0.18%, to 13,791.65.  Materials (.SPLRCM) fell most among S&P 500 sectors, shedding 2.5%.

In data out on Wednesday, new orders for U.S.-made goods increased less than expected in May, fanning fears of an economic slowdown. Meanwhile, China's services activity expanded at the slowest pace in five months in June, according to a private-sector survey.  Chip stocks fell after China said it would control exports of some metals widely used in the semiconductor industry as tensions between Beijing and Washington rise over access to high-tech microchips.  The Philadelphia SE Semiconductor Index (.SOX) dropped 2.2%, while Intel (INTC.O) shares sank 3.3% and Texas Instruments (TXN.O) declined 1.8%.

Shares of Meta Platforms (META.O) rose 2.9% ahead of the expected release of the company's Twitter-rival app, Threads, on Thursday.  Megacap stocks such as Meta have led the gains so far this year for major equity indexes, including the biggest first-half increase for the Nasdaq Composite in 40 years.  “We could see the largest stocks pull back, but the average stock catch up,” said Jack Ablin, chief investment officer at Cresset Capital. “We are looking for somewhat of a convergence.”  Shares of United Parcel Service (UPS.N) fell 2.1% after the Teamsters Union said UPS "walked away" from negotiations over a new contract, a claim the shipping giant denied.

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.  The S&P 500 posted 18 new 52-week highs and one new low; the Nasdaq Composite recorded 55 new highs and 65 new lows.

About 10.3 billion shares changed hands in U.S. exchanges, compared with the 11.1 billion daily average over the last 20 sessions.