The S&P 500 held lower on Wednesday afternoon after the Federal Reserve signaled comfort in moving to higher interest rate levels "fairly soon."
The S&P 500 was down 0.18% and the Nasdaq declined 0.13%. The Dow Jones Industrial Average climbed 0.06% after reaching an intraday record high of 20,771 earlier.
Many members of the Federal Open Market Committee said at the Jan. 31-Feb. 1 meeting that it would be appropriate fairly soon for the Fed to make a move higher, so long as the incoming labor market and inflation data was in line with or stronger than expected, the minutes from the meeting revealed.
Some members also expressed concern that language emphasizing a gradual pace may be misunderstood to mean only one rate hike this year.
"A few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the Committee greater flexibility in responding to subsequent changes in economic conditions," according to the meeting minutes. "Several judged that the risk of a sizable undershooting of the longer-run normal unemployment rate was high, particularly if economic growth was faster than currently expected."
The meeting minutes release confirmed a recent switch in rhetoric among Fed members in signaling that the U.S. economy is heating up and that it must act soon. The minutes also signaled that a move at the March meeting was still on the table.
The Dow fluctuated on Wednesday with DuPont (DD - Get Report) contributing the most to the blue-chip index. DuPont soared 4% on reports its merger with Dow Chemical (DOW) would clear regulatory hurdles in Europe. The European Union will reportedly OK the deal ahead of the April deadline.
Wall Street returned from the long holiday weekend on Tuesday with enough energy to push stocks to new records for their second session in a row. The Dow has notched records for the past eight sessions.
The markets are swiftly approaching an overbought scenario, according to Helene Meisler of Real Money, our premium site for active investors. "According to my own work, we will be overbought later this week," Meisler wrote in Wednesday's column. "Longtime readers know that when we are staring at a string of red numbers to be dropped, I consider the market oversold. When we are staring at a string of green or black numbers to be dropped, we are overbought."
Existing home sales in the U.S. in January rose to their best level since February 2007. Sales of previously owned homes rose by 3.3% in January to an annual rate of 5.69 million. Inventory remained constrained, dropping 7.1% year over year. The median price of homes increased 7.1%.
Crude oil pulled back from Tuesday's rally, returning to a level below $54 a barrel once again. Crude surged on Tuesday on optimism the Organization of Petroleum Exporting Countries' recent production cut agreement was beginning to be felt on global stockpiles. OPEC also signaled it would be willing to work with the U.S. as a "strategic partner" in balancing markets.
West Texas Intermediate crude was down 1.4% to $53.59 a barrel on Wednesday.
"The petroleum markets are on the defensive in Wednesday trade with nearby April Brent confirming a daily reversal to the downside back to the familiar middle portion of its trading range following Tuesday's attempted breakout to the upside," said Tim Evans, energy futures specialist at Citi, in a note.
The earnings season barrels on this week with a particular focus on the retail sector. Walmart (WMT - Get Report) , Macy's (M - Get Report) , and Home Depot (HD - Get Report) each reported better-than-expected profit on Tuesday, and Gap (GPS - Get Report) , J.C. Penney (JCP - Get Report) , and Foot Locker (FL - Get Report) are set to report later in the week. More than four-fifths of S&P 500 companies have reported their earnings so far this season with 66% of those exceeding earnings estimates and 53% surpassing sales consensus.
TJX Cos. (TJX - Get Report) , which owns TJ Maxx, narrowly beat profit and sales estimates over its fourth quarter. Earnings of $1.03 a share crept higher from 99 cents in the year-ago quarter and exceeded consensus of $1. Revenue of $9.47 billion beat estimates of $9.44 billion. Same-store sales rose by 3%, topping expectations of 2.5% growth. The retailer also said it plans to repurchase at least $1.3 billion worth of shares over this fiscal year.
New contracts increased by 14%, while deliveries increased by 12% over the year earlier. Toll ended its quarter with a backlog 19% higher than a year earlier, sitting at $4.35 billion. Toll also announced a new quarterly dividend of 8 cents a share, payable on April 28.
Dish Networks (DISH - Get Report) swung to a profit in its recent quarter from a loss in the year-ago quarter. Earnings of 70 cents a share were far better than a loss of 27 cents a year earlier, and bested consensus by 4 cents. Dish reported 28,000 more net Pay-TV subscribers over the quarter. The stock gained 1% on Wednesday.
Garmin (GRMN - Get Report) surged 9% on Wednesday after reporting a better-than-expected quarter and issuing robust growth estimates for 2017. Adjusted earnings of 73 cents a share surpassed consensus of 58 cents. Sales rose 10% to $860.8 million, well above estimates of $793 million.
For the full-year, Garmin anticipates adjusted earnings of $2.65 a share on $3.02 billion in sales. Analysts anticipated $2.66 a share on $2.97 billion.
Argos Therapeutics (ARGS) moved sharply lower, down 67%, on Wednesday on poor results from a study into a cancer treatment. The drugmaker said an independent review into a Phase 3 trial of its renal cell carcinoma treatment be discontinued for lack of results. The study's primary endpoint had been overall survival.
Unilever (UL) shares rose 5% Wednesday after the consumer products company issued a statement saying it would review options to enhance shareholder value after rejecting a $143 billion offer from Kraft Heinz (KHC - Get Report) . The company said it was "conducting a comprehensive review of options available to accelerate delivery of value for the benefit of our shareholders."