US stocks get modest lift from Federal Reserve comments

Friday, August 12, 2016, Vol. 40, No. 33

NEW YORK (AP) — U.S. stocks closed barely higher Wednesday as big gains for utilities balanced out losses for retailers like Lowe's, Target and Staples.

Stocks fell in morning trading as a recent slump in phone company and utility stocks continued. But the indexes reversed directions after noon as those stocks turned higher, as did banks and household goods makers. Investors scrutinized the minutes from the Federal Reserve's late July meeting and found no suggestion the central bank's in any hurry to raise interest rates.

Federal Reserve officials felt near-term risks to the U.S. economy have diminished as job growth improved in June and July. It said another boost in interest rates might be warranted before long, but investors doubt that will happen in September and they're not sure if it will happen in the months after that.

"The minutes today were not any kind of a surprise," said Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute. "There's probably some relief there."

The Dow Jones industrial average rose 21.92 points, or 0.1 percent, to 18,573.94. The Standard & Poor's 500 index gained 4.07 points, or 0.2 percent, to 2,182.22 after falling as much as 10 points early on. The Nasdaq composite inched up 1.55 points to 5,228.66. That left the market little changed from Tuesday and continued a persistent pattern of small moves for U.S. stocks.

Utility companies made the biggest gains, as low interest rates and bond yields make their big dividend payments more appealing. Dominion Resources jumped $1.97, or 2.6 percent, to $76.65 and Xcel Energy added 69 cents, or 1.7 percent, to $42.33.

Bond prices turned higher and the yield on the 10-year Treasury note fell to 1.55 percent from 1.58 percent. The dollar weakened, falling to 100.19 yen from 100.25 yen. The euro rose to $1.1290 from $1.1277. In recent days the Fed's decision to leave rates unchanged has weakened the dollar, helping exporters.

Consumer companies slumped after weak results and forecasts for some major retailers. Home improvement retailer Lowe's cut its annual profit forecast after it reported a profit that was smaller than analysts expected, and sales at older stores were weak. Those sales are considered an important measurement of retailer performance. Lowe's stock fell $4.60, or 5.6 percent, to $76.88. Target also lowered its profit projections as it deals with stiff competition. Its stock lost $4.85, or 6.4 percent, to $70.63.

Office supply retailer Staples fell after disappointing analysts with its forecasts, which included further sales declines. Its stock fell 66 cents, or 7.1 percent, to $8.67. Rival Office Depot lost 26 cents, or 6.9 percent, to $3.52.

Urban Outfitters jumped after it disclosed solid second-quarter results. The company said sales at older stores improved, surprising analysts who expected a decline. The stock gained $4.71, or 15.4 percent, to $36.05. It's up 58 percent this year, wiping out a steep loss from 2015.

Barnes & Noble tumbled after the book seller said CEO Ronald Boire is leaving after less than a year in the job. The company said its board determined that Boire was not a good fit. Chairman and former CEO Leonard Riggio, who was scheduled to retire next month, will stay with the company as it seeks a new CEO.

Barnes & Noble has been cutting costs and closing stores as it copes with people doing more of their shopping online and at discount stores. Its stock sank $1.47, or 11 percent, to $11.91.

Oil prices climbed after the Energy Information Administration said U.S. crude oil inventories shrank by 2.5 million barrels last week and gas stockpiles decreased by 2.7 million barrels. The declines were larger than expected, which is generally good for oil prices. Benchmark U.S. crude added 21 cents to $46.79 a barrel in New York. Brent crude, used to price international oils, inched up 62 cents, or 1.3 percent, to $49.85 a barrel in London.

In other energy trading, wholesale gasoline added 3 cents to $1.45 a gallon and heating oil rose 3 cents to $1.49 a gallon. Natural gas held steady a $2.62 per 1,000 cubic feet.

The price of gold fell $8.10 to $1,348.80 an ounce. Silver fell 23 cents, or 1.1 percent, to $19.65 an ounce. Copper gave up 2 cents to $2.15 a pound.

China's cabinet approved an initiative that would give foreign investors more access to Chinese stocks by linking the stock exchanges in Hong Kong and the mainland city of Shenzhen. Hong Kong's financial system is open to foreign investors while mainland markets are sealed off. A similar measure to link Hong Kong with the Shanghai stock exchange took effect in 2014.

France's CAC-40 dropped 1 percent while Germany's DAX shed 1.3 percent. The FTSE 100 in London declined 0.5 percent. The Hang Seng fell 0.5 percent and in Tokyo the Nikkei 225 gained 0.9 percent. South Korea's Kospi rose 0.9 percent.