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Wall Street ends up but off highs after Trump announcement, Fed minutes

Published 08/16/2017, 04:39 PM
© Reuters. People pose next to the Wall Street Bull in the financial district in New York
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks ended slightly firmer on Wednesday but off the day's highs as worries mounted over President Donald Trump's agenda and minutes from the latest Federal Reserve meeting suggested policymakers are worried about weak inflation.

Indexes lost some ground following Trump's disbanding of two high-profile business advisory councils after two more CEOs resigned from the manufacturing council on Wednesday in response to his comments on weekend violence in Charlottesville, Virginia.

Wall Street stayed volatile following the release of the last Federal Reserve meeting's minutes, which showed policymakers appeared increasingly wary about recent weak inflation. Some called for a halt to further interest rate hikes until it was clear the trend was transitory.

"The reaction to the statement was mixed. Investors are worried inflation is not hitting the Fed's target and that the Fed may be tightening too early," said Bucky Hellwig, senior vice president at BB&T (NYSE:BBT) Wealth Management in Birmingham, Alabama.

At the same time, that could push out the next rate increase, which would be supportive to stocks, he said.

Investors have been watching a slide in inflation readings in recent months, which remain below the Fed's 2 percent target.

Fed policymakers unanimously decided to keep interest rates unchanged at their July 25-26 meeting.

The S&P materials index (SPLRCM) rose the most of any sector, gaining 0.9 percent, following gains in copper and other metals.

The Dow Jones Industrial Average (DJI) rose 25.88 points, or 0.12 percent, to end at 22,024.87, the S&P 500 (SPX) gained 3.5 points, or 0.14 percent, to 2,468.11 and the Nasdaq Composite (IXIC) added 12.10 points, or 0.19 percent, to 6,345.11.

Trump announced the break-up of the advisory councils after 3M Co's (N:MMM) Inge Thulin became the latest of several chief executives to leave Trump's American Manufacturing Council, and the president's Strategic and Policy Forum broke up of its own will.

"That throws a little bit more doubt into the president's abilities to push his policies through," said David Schiegoleit, managing director of investments at U.S. Bank Private Wealth Management in Newport Beach, California.

After the bell, shares of Cisco Systems (O:CSCO) fell 2.3 percent after it reported results.

Advancing issues outnumbered declining ones on the NYSE by a 1.52-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 98 new highs and 85 new lows.

© Reuters. People pose next to the Wall Street Bull in the financial district in New York

About 5.8 billion shares changed hands on U.S. exchanges. That compares with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

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