You are here

US: Stocks edge up as Fed minutes dampen hike expectations

39423400 - 11_08_2016 - FILES-US-STOCKS-MARKETS-OPEN.jpg

[NEW YORK] Wall Street stocks edged higher on Wednesday as minutes from the Federal Reserve's July meeting boosted expectations the US central bank was not likely to hike rates in September.

Worries about Fed minutes had been a drag on bourses in Asia and Europe, prior to the 1800 GMT release of the minutes. US stocks has also been in negative territory before the release, in part due to disappointing earnings from retailers Target and Lowe's.

The record of the July Fed meeting showed policy makers believed risks to the US economy had lessened but wanted to keep their interest rate policy "options open." Policy makers also believed the global financial system had held up well to the shock created by Britain's June vote to exit the European Union, the minutes said.

"Market expectations for a rate hike in September are still low, and this committee tends to be cautious," said Sara Johnson and Ozlem Yaylaci, economists at IHS Markit.

That helped the S&P 500 to a 0.2 per cent rise for the day, and the Dow Jones Industrial Average to a 0.1 per cent gain.

Earlier, Frankfurt's DAX 30 had fallen 1.3 per cent, and the Paris CAC 40 lost 1.0 per cent.

London stocks dropped 0.5 per cent, winning some support from encouraging unemployment figures - the British rate was unchanged at 4.9 per cent and job-loss claims fell in July despite Brexit vote, which is expected to hurt economic growth and investment.

Equity markets in Hong Kong and Shanghai both dipped, but Tokyo's benchmark Nikkei 225 index climbed 0.9 per cent, snapping a two-day losing streak as a drop in the haven yen currency lifted exporters.

The dollar edged lower against the euro and the yen as traders pushed back the time-frame for Fed rate hikes.

"The minutes' cautious undertones suggested a Fed on hold on rates over the foreseeable future which is weighing on the dollar," said Joe Manimbo, a currency market analyst at Western Union.

Oil prices pushed modestly higher as the weekly US inventories report showed significant declines in stockpiles of both crude and gasoline.