Wall Street Turns Lower After Fed Minutes Highlight Tough Recovery
Wall Street finished lower on Wednesday after the Federal Reserve raised concerns that the US economic recovery from the devastating effects of the pandemic faced a highly uncertain path.
In the minutes of the July Fed meeting, the policy committee said that the swift rebound in employment seen in May and June had likely slowed and that additional “substantial improvement” in the labor market would hinge on a “broad and sustained” reopening of business activity.
The Fed also ruled out for now more dovish monetary policy measures such as yield-curve control.
“The Fed was cautious in the minutes and has been over the last month,” said Mike O’Rourke, chief market strategist, at Jones Trading. “I think the fact that the Fed was not too warm on the yield-curve control and some of the extreme measures investors may have liked to see was a concern.”
The Dow Jones Industrial Average closed 85.19 points lower, or 0.31 percent, to 27,692.88, the S&P 500 lost 14.93 points, or 0.44 percent, to 3,374.85 and the Nasdaq Composite dropped 64.38 points, or 0.57 percent, to 11,146.46.
Earlier in the session, the S&P 500 hit an intraday record of 3,399.54 and Nasdaq of 11,257.422.
Losses on Wall Street came after Apple Inc became the first publicly listed US company to cross $2 trillion in market capitalization. Already the most valuable listed company in the world, the iPhone maker provided the biggest support to the three main indexes.
The company’s stock was boosted by expectations of long-term success from the country’s biggest tech names in a post-coronavirus world.
Strong results from retailers Target and Lowe’s also lifted sentiment earlier in the session.
The S&P 500 closed at a record on Tuesday in what has been its fastest recovery ever from a bear market. The Nasdaq recouped its losses from the pandemic sell-off two months ago, but the Dow is still nearly 5 percent below February’s record closing high.
On US exchanges 8.61 billion shares changed hands, compared with the 9.72 billion average for the last 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by a 1.62-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored decliners.
The S&P 500 posted 26 new 52-week highs and no new lows; the Nasdaq Composite recorded 74 new highs and 25 new lows.