US close: Stocks slip as investors digest Fed minutes

(Sharecast News) - Wall Street faced a downturn on Wednesday as US stocks closed in the negative, with the biggest drops coming from the technology-centric Nasdaq Composite. The Federal Reserve's minutes from its July meeting were released late in the session, showing that a majority of senior officials now expected "upside inflation risks".

By the close, the Dow Jones Industrial Average was down 0.52% at 34,765.74 points, while the S&P 500 registered a dip of 0.76% to end the day at 4,404.33.

The Nasdaq Composite took the hardest hit, shrinking by 1.15% and finishing at 13,474.63.

On the foreign exchange front, the dollar was flat against sterling at 78.55p, while it slipped 0.01% against the euro to trade at 91.91 euro cents.

The greenback dropped 0.05% on the yen, changing hands at JPY 146.28.

"US stocks have finally remembered how to go down in August, as inflation and China fears hit home after a stellar run for the year so far," said IG chief market analyst Chris Beauchamp earlier.

"For now the selling is contained, but with a lighter calendar for the moment thoughts will inevitably turn to Jackson Hole and what central bankers might say about the fight against inflation.

"With this in mind, some more trimming of profits might be the theme for the second half of August."

Fed minutes, economic data paint mixed picture for US economy

The minutes from the Federal Reserve's July meeting were at the top of the agenda late in the day, after the central bank decided to increase the federal funds rate by a quarter of a percentage point to between 5.25% and 5.5% last month - its highest point in more than two decades.

They showed a divided opinion within the Federal Open Market Committee, with a majority hinting at the need for "further tightening of monetary policy" to tackle rising inflation, which they viewed as having "significant upside risks".

Another faction, however, expressed apprehension over the economic outlook.

The minutes noted that some officials held concerns about potential economic downturns, despite the present resilience of the economy.

Committee members also pointed towards the possibility of a short-term slowdown in real GDP growth, and a slight weakening in the labour market.

"With the Fed at or near the end of its tightening cycle and rate cuts looking likely in 2024, we expect to see more discussion at future FOMC meetings about when to begin scaling back the reduction in the Fed's balance sheet," said Oxford Economics lead US economist Nancy Vanden Houten.

"The July minutes note that several FOMC members thought the Fed could continue to reduce the balance sheet even after rate cuts are underway.

"Our baseline assumes some tapering off on the pace of reduction begins in early 2024, but the comments in the minutes suggest we might be looking at a later timetable."

In other economic headlines, the industrial sector displayed promising vigour in July, with a report from the Federal Reserve showing a 1% rise in industrial production during the month, largely propelled by increased utility consumption due to the sweltering summer and a resurgence in vehicle output.

The uptick eclipsed the Wall Street Journal's projection for 0.5% growth.

In contrast, June's figures were adjusted to a more significant decline of 0.8%, compared to the preliminary estimate of a 0.5% decrease.

On the housing front, July brought good tidings for construction and real estate, with housing starts seeing a 3.9% jump following June's considerable 11.7% fall.

Building permits, indicating future construction activity, meanwhile saw a modest increase of 0.1% in the same month.

Retailers and tax-filers shine with positive quarterly results

In equities, Target Corporation rose 2.96% after it outperformed market expectations in its second-quarter earnings.

However, it wasn't all sunny skies for the retail giant, as it lowered its full-year guidance.

Earnings per share expectations were adjusted to a range of between $7 and $8, down from the previous prediction of $7.75 to $8.75.

Elsewhere in the retail domain, TJX Companies jumped 4.13% after reporting a robust performance on the back of an exceptional second quarter, as it revised its full-year guidance upwards.

The off-price retail group's adjusted earnings per share came in at 85 cents for the period, pleasantly surpassing the market consensus for 77 cents.

Finally, tax-filing provider H&R Block surged 9.7% after it reported smashing second-quarter earnings late on Tuesday, topping market forecasts.

H&R Block also revised its full-year guidance in an upward direction.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Travelers Company Inc. (TRV) $165.39 1.16% Home Depot Inc. (HD) $333.03 0.27% Merck & Co. Inc. (MRK) $108.89 0.06% Walmart Inc. (WMT) $159.26 0.05% Verizon Communications Inc. (VZ) $33.27 0.03% Coca-Cola Co. (KO) $60.47 0.02% Dowdupont Inc. (DWDP) $0.00 0.00% Nike Inc. (NKE) $106.61 -0.02% Visa Inc. (V) $239.26 -0.23% Johnson & Johnson (JNJ) $172.39 -0.32%

Dow Jones - Fallers

Intel Corp. (INTC) $33.53 -3.57% Walgreens Boots Alliance, Inc. (WBA) $28.19 -1.43% Caterpillar Inc. (CAT) $274.51 -1.03% Procter & Gamble Co. (PG) $153.15 -1.02% McDonald's Corp. (MCD) $285.20 -1.01% Boeing Co. (BA) $229.95 -0.99% Goldman Sachs Group Inc. (GS) $329.11 -0.93% International Business Machines Corporation (CDI) (IBM) $140.64 -0.87% Salesforce.Com Inc. (CRM) $206.99 -0.86% Walt Disney Co. (DIS) $86.35 -0.82%

S&P 500 - Risers

H&R Block Inc. (HRB) $38.88 9.70% Progressive Corp. (PGR) $136.02 8.87% Allstate Corp (The) (ALL) $109.74 4.44% TJX Companies Inc. (TJX) $89.31 4.13% Target Corp. (TGT) $128.90 2.96% VF Corp. (VFC) $20.43 2.30% AES Corp. (AES) $18.41 2.28% TripAdvisor Inc. (TRIP) $15.32 2.00% CenturyLink Inc. (LUMN) $1.73 1.78% Public Service Enterprise Group Inc. (PEG) $60.40 1.53%

S&P 500 - Fallers

Jack Henry & Associates Inc. (JKHY) $156.47 -7.03% Dish Network Corp. (DISH) $7.11 -5.95% Resmed Inc. (RMD) $173.90 -5.26% Nektar Therapeutics (NKTR) $0.77 -5.09% American Tower Corp (Reit) (AMT) $177.99 -4.13% Sba Communications Corp. (SBAC) $220.48 -4.11% Advanced Micro Devices Inc. (AMD) $107.19 -3.74% Waters Corp. (WAT) $274.86 -3.72% Illumina Inc. (ILMN) $169.54 -3.68% Sealed Air Corp. (SEE) $35.22 -3.64%

Nasdaq 100 - Risers

Check Point Software Technologies Ltd. (CHKP) $130.63 1.59% Ross Stores Inc. (ROST) $115.23 1.07% Hasbro Inc (HAS) $64.64 0.95% Take-Two Interactive Software Inc. (TTWO) $140.27 0.54% Paypal Holdings Inc (PYPL) $59.68 0.35% Cintas Corp. (CTAS) $490.27 0.33% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $457.46 0.28% Verisk Analytics Inc. (VRSK) $235.33 0.23% Marriott International - Class A (MAR) $206.48 0.23% Monster Beverage Corp (MNST) $58.30 0.15%

Nasdaq 100 - Fallers

Dish Network Corp. (DISH) $7.11 -5.95% Qurate Retail Inc. (QRTEA) $0.92 -4.45% Illumina Inc. (ILMN) $169.54 -3.68% Intel Corp. (INTC) $33.53 -3.57% Baidu Inc. (BIDU) $130.58 -3.52% J.B. Hunt Transport Services Inc. (JBHT) $192.70 -3.43% Tesla Inc (TSLA) $225.60 -3.16% JD.com, Inc. (JD) $34.88 -3.03% Mercadolibre Inc. (MELI) $1,247.44 -3.00% Autodesk Inc. (ADSK) $203.65 -2.81%