Despite a few hiccups following the release of minutes from the last Federal Reserve monetary policy meeting, stocks ended Wednesday relatively unchanged even as more companies slash their earnings projections.
The Dow Jones industrial average closed at 12,604.53, down 48.59 points or 0.4 per cent. The broader S&P 500 closed at 1,341.45, down 0.02 point or 0 per cent – stretching out its losing streak to five straight days, if only by a whisker.
In Canada, the S&P/TSX composite index closed at 11,544.64, up 32.42 points or 0.3 per cent.
Stocks had tread water throughout most of the session, only to sink immediately after the Fed minutes shed light on the central bank’s view on additional stimulus; stocks recovered toward the close of trading.
While the minutes said that a “few members expressed the view that further policy stimulus likely would be necessary” investors seemed flustered at first that they didn’t point to more immediate action.
Yet, economists pointed out that the minutes do not incorporate the most recent batch of disappointing economic data, including last Friday’s release of dismal payrolls numbers for June.
The lacklustre market moves also follow a number of slashed earnings projections, which have rattled nerves at the start of the second quarter earnings season.
On Tuesday, Advanced Micro Devices Inc. cut its outlook because of worsening conditions in Europe and China, and engine-maker Cummins Inc. lowered its revenue outlook for 2012 – moves that reverberated through their respective sectors.
In the latest revised outlook, electronics retailer Hhgregg Inc. sank 36.4 per cent after it cuts its full-year profit forecast. The revision hit Best Buy Co. Inc., whose shares fell 8.4 per cent.
As well, Goldcorp Inc. cut its full-year gold production forecast, due to lower output from mines in Mexico and Canada. The shares fell 10 per cent.
In Europe, the U.K.’s FTSE 100 closed relatively flat, while Germany’s DAX index rose 0.2 per cent.
The yield on Spain’s 10-year government bonds retreated to 6.5 per cent, down 23 basis points, after the government introduced an austerity package of €65-billion worth of deficit cuts.
The yield on Italy’s 10-year government bonds fell to 5.8 per cent, down 13.5 basis points. There are 100 basis points in a percentage point.
Crude oil rose to $85.81 a barrel, up $1.90. Gold fell to $1,575.70 an ounce, down $4.10.
Among commodity producers, Suncor Energy Inc. rose 1.9 per cent and Barrick Gold Corp. fell 2 per cent.
Potash Corp. of Saskatchewan Inc. rose 0.8 per cent following rising concerns about the weak U.S. corn crop.