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Wall Street closed higher on Wednesday as investors assessed the minutes of the Federal Reserve’s last meeting, which showed the possibility of further rate hikes and monitoring of corporate earnings. The Nasdaq Composite, the S&P 500 and the Dow ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.2%, or 119.65 points, to close at 53,463.05. Nineteen components of the 30-stock index ended in the positive zone and 11 ended in the negative.
The tech-heavy Nasdaq Composite advanced 0.2% to close at 26,331.09.
The S&P 500 gained 0.2% to end at 7,707.98. Out of the 11 broad sectors of the broad-market index, six ended in positive territory, while four were in negative territory and one remained unchanged. The Consumer Discretionary Select Sector SPDR (XLY), the Materials Select Sector SPDR (XLB) and the Health Care Select Sector SPDR (XLV) rose 2.1%, 1.7% and 3.5%, respectively, while the Industrials Select Sector SPDR (XLI) fell 0.9%.
The fear gauge, the CBOE Volatility Index (VIX), decreased by 6% to 14.89.
Fed Minutes Keep Rate Hike on the Table
Federal Reserve officials said in the minutes of their July FOMC meeting that they may have to raise interest rates to combat inflation unless it declines.
The Fed kept the federal funds rate at 3.5% to 3.75%. Three members believed that another 25-basis-point rate hike is warranted. However, Fed officials said that current financial conditions are not restrictive enough to bring down inflation to its 2% target.
Overall, the Fed’s priority of bringing down inflation is reflected in the minutes of the meeting, and rate hikes are not ruled out.
Earning Results
The Estée Lauder Companies Inc. (EL – Free Report) reported quarterly earnings of $0.39 per share, up from $0.09 a year ago and ahead of the Zacks Consensus Estimate of $0.32. Revenues totaled $3.63 billion, up from $3.41 billion a year ago and 2.15% above the consensus estimate.
Toll Brothers, Inc. (TOL – Free Report) reported quarterly earnings of $2.97 per share, down from $3.73 a year ago and ahead of the Zacks Consensus Estimate of $2.9. Total revenues were $2.66 billion, down from $2.95 billion a year ago and 2.36% above the consensus estimate.
Consequently, the stock prices of The Estée Lauder and Toll Brothers surged 16.3% and 4%, respectively. The Estée Lauder stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
For the week ended Aug. 14, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.4 million barrels from the previous week.
