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US: Stocks up again, S&P hits record on Fed minutes
[NEW YORK] Wall Street finished higher on Wednesday for the fifth consecutive session, and the S&P 500 hit an all-time high as investors reacted favourably to the US central bank's signal that a rate hike is coming "soon."
But European equities traded broadly flat, despite gains across most of Asia, ahead of the news from the Federal Reserve's most recent policy meeting.
Meanwhile, oil prices dipped despite data showing a drop in US crude stockpiles, and progress by Opec as well as non-Opec producers - including Russia - toward extending production cuts for nine months.
The blue-chip Dow Jones Industrial Average rose 0.4 per cent to close at 21,012.42, while the broader S&P 500 gained 0.3 per cent, reaching 2,404.39.
The minutes from the Fed's May 2-3 meeting showed the time would "soon" be right to raise rates, which most economists take to mean at the June 13-14 meeting.
There was also broad agreement among officials on the staff proposal on how to unwind the Fed's massive balance sheet starting later this year, a process the central bank wants to do gradually and predictably, but which economists say nonetheless will put upward pressure on interest rates.
"The big news obviously today was the release of the Fed minutes and the market basically liked what the Fed and its head Janet Yellen said," Bill Lynch of Hinsdale Associates said.
London's stock market eked out a small gain of 0.4 per cent, while Frankfurt and Paris both slid 0.1 per cent.
Most Asian indices rose, with Shanghai recovering from early selling after Moody's ratings agency cut China's credit rating on worries about its growing debt mountain.
Moody's said the downgrade of the world's number-two economy was prompted by the likelihood of a "material rise" in debt throughout the economy and as potential growth slows.
China's economy grew last year at its slowest pace in a quarter-century, and there are expectations it will continue to ease as Beijing addresses a toxic brew of unregulated and risky lending which is increasingly seen as a threat to global financial stability.
However, "markets have largely shrugged off Moody's downgrade of China's credit rating overnight, with even Chinese stocks and the yuan being relatively unfazed," noted Oanda analyst Craig Erlam.
Oil prices briefly pushed higher after US government data showed commercial crude inventories fell by 4.4 million barrels in the week ending May 19.
But they fell back after oil producers within and outside Opec moved towards an agreement maintaining cuts in output into next year after a joint committee recommended a nine-month extension.
Late last year, 24 countries, including those in the Opec and Russia, agreed to cut production by 1.8 million barrels per day through June in order to reduce a global supply glut.
The producers were expected to agree to the committee recommendation at a meeting at Opec headquarters in Vienna on Thursday.
Market analyst Fawad Razaqzada said oil prices, which have been rising over the past month, could pull back as speculators take profits after a deal is certain.
"But if there are any surprise announcements then the reaction of oil prices may well be very different," he added.