By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks finished little changed Wednesday after minutes from the last Federal Open Market Committee meeting showed discussion of a third round of quantitative easing.
“We read something that happened a month ago and think the Fed is thinking about quantitative easing. Yes, they were!” said Art Hogan, a strategist at Lazard Capital Markets.
Since that meeting, the economic data have improved, which for Hogan negates the impression left by the Fed minutes.
“I don’t think you look at this and say they’ll definitely go or won’t; it’s one more shade of gray,” said Scott Brown, chief economist at Raymond James.
U.S. Markets Close Session Flat Investors pared their losses but stocks remained broadly lower after minutes from the recent Federal Reserve meeting showed central-bank officials pushing for additional efforts to stimulate the economy. Paul Vigna has details on The News Hub.
After an 83-point fall, the Dow Jones Industrial Average DJIA -0.23% lost 30.82 points, or 0.2%, at 13,172.76.
Fourteen of its 30 components lost ground, led by Hewlett-Packard Co. HPQ -4.79% , which fell 3.7% ahead of its earnings report after the close.
Rival personal-computer maker Dell Inc. DELL -0.51% slid 5.4% after reducing its profit forecast for the year. Read more about Dell and H-P.
The S&P 500 index SPX +0.02% rose 0.32 point to 1,413.49, with materials the best performer and industrials the worst of its 10 industry groups.
Sunrise Senior Living Inc. SRZ +59.69% rallied after Health Care REIT HCN -2.69% said it would buy the manager of retirement communities.
The Nasdaq Composite COMP +0.21% rose 6.41 points, or 0.2%, to 3,073.67.
Decliners outpaced advancers roughly 2-to-1 on the New York Stock Exchange, where 600 million shares traded. Composite volume topped 3 billion.
The U.S. dollar DXY -0.49% fell against other currencies, including the euro EURUSD -0.01% . Read more on the currency markets.
Oil prices gained, with crude futures CLV2 -0.03% adding 42 cents to close at $97.26 a barrel. Read more about oil trading.
Running on empty?
“The market is getting a little tired; it’s had a great run here over the last few weeks and there are thoughts now as to whether Europe or the Fed may disappoint,” said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc.
“Some of the data is getting a little better, and it could cause the chances of more Fed easing to decrease,” Fitzpatrick added, referring to speculation that the Fed will embark on a third round of bond buying.
Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research, finds it difficult to fathom that many market participants are still holding out hope for QE3, given the recent strength in the market, the rise in interest rates and improved economic reports. “There is no evidence or rationale for easing at this point in time,” Frederick said.
Raymond James’s Brown believes whether Fed Chairman Ben Bernanke signals another round of asset purchases by the Fed largely depends on economic reports, which lately have been stronger.
“It raises the stakes for Bernanke’s Jackson Hole speech,” Brown said of the annual event in Wyoming, where the Fed chief has in the past delivered market-moving speeches. “We’re still definitely in recovery mode; it’s not especially strong, but it’s not especially weak,” said Brown.
Wednesday’s economic reports included data from the National Association of Realtors, which said sales of existing homes rose 2.3% in July, in line with expectations and illustrating an increase in activity in the housing market. Read more about the housing data.
In Europe, German Chancellor Angela Merkel and French President Francois Hollande will meet Thursday to talk about the euro-area debt crisis, with both planning to meet later in the week with Greece’s prime minister.
Kate Gibson is a reporter for MarketWatch, based in New York.
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