By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks edged lower early
Wednesday after two straight days of gains, as investors waited for
minutes from the latest meeting of Federal Reserve policy
makers.
Target Corp.(TGT) and Lowe's Cos.(LOW) both fell as each
retailer cut its outlook while reporting quarterly results.
Apple Inc.(AAPL) gave up a little ground after nailing an
all-time split-adjusted closing high of $100.53 on Tuesday, as
shares dipped less than 0.1% on Wednesday. Read: 7 reasons why this
product cycle will be different for Apple
The S&P 500(SPX) dipped 2 points, or 0.1%, 1979, trading not
far off from its July 24 record close at 1,987.98. The Dow Jones
Industrial Average(DJI) fell 16 points, or 0.1%, to 16,904, while
the Nadaq Composite(RIXF) lost 8 points, or 0.2%, to 4519.
No major U.S. economic releases are on Wednesday's calendar
beyond the minutes of the July 29-30 Federal Open Market Committee
meeting. "The question which everyone will be asking is if the Fed
are ready to increase the interest rate sooner rather than later.
Some hawkish members have certainly started beating the drums of an
early increase," said Naeem Aslam, chief market analyst at Ava
Trade. Read more: Morgan Stanley's take on the Fed's exit plan
While investors may glean clues about the Fed's exit strategy
from the minutes, markets may also quickly move past them to focus
on Fed Chairwoman Janet Yellen's speech at 10 a.m. Eastern Friday
in Jackson Hole, Wyo. Read: Yellen to stress patience on rates at
Jackson Hole
On Tuesday, stocks advanced after better-than-expected housing
starts and a handful of upbeat earnings.
What strategists are saying: Wall Street has seen a boost in
recent sessions due to a lack of upheaval on the geopolitical
front, but this rally looks to be running out of steam, said Joao
Monteiro, analyst at Valutrades, in a note to investors.
"This is perhaps no real surprise -- markets are now nudging
back into that inflated territory and there is still the risk of
one or more of the conflict hot-spots escalating significantly,
although the risk-on trade remains in favor -- we have USD/JPY
(USDJPY) back above Yen103 and gold (GCZ4) resolutely below
$1,300/oz," he said. If the Fed minutes show another bias, Monteiro
said equities "could well find an excuse to move higher once
again."
Investors should keep buying the dips in this market, because
it's just showing signs of a maturing bull phase, rather than
"warning of an impending market turnaround," said Citi strategists
in a recent note. Also read: Wednesday's Need to Know: The 'short
of the decade' and one willful bull's call for Dow 19,000
Movers & shakers: Hertz Global Holdings Inc.(HTZ) shares
slumped 12% premarket after the rental-car company said it expects
to be "well below the low end" of guidance, due to operational
challenges and costs from restating its financial statements for
the last three years.
Lowe's fell 3% in premarket trading after the company cut its
2014 sales outlook, while Target shed 1.4% after lowering its
outlook for the year, still hurt by a data breach and reduced
traffic at its stores. (Read more about today's jumpiest stocks in
the Movers & Shakers column
http://www.marketwatch.com/story/target-lowes-petsmart-report-earnings-wednesday-2014-08-19.)
Other markets: The British pound (GBPUSD) rose against the
dollar after the minutes of the Bank of England's latest policy
meeting showed a split vote for the first time in three years, with
two members voting for a rate hike. The FTSE 100 index was down
0.5%, while the Stoxx Europe 600 index was off 0.4%. Russia and
Ukraine worries hurt Carlsberg AS , which slid 4% after it warned
that problems due to that conflict will have a bigger-than-expected
hit on full-year earnings than initially thought.
In Asia, stocks closed with moderate gains, outside a small loss
for the Shanghai Composite Index .
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