Stocks on Wall Street are trading higher this afternoon, but not yet making a big dent on losses from the previous two trading sessions.
By Paolo Palazzi-Xirinachs
Wednesday, July 9, 2014
Traders had been looking ahead to a speech by European Central Bank President Mario Draghi, and minutes from the most recent Federal Reserve meeting, focusing on any mention of a timeline to raise US interest rates plus the Fed's take on strengthening economic data. The S&P 500 has risen 0.5% to 1,972.86 at 2:30 p.m. in New York. The gauge initially trimmed gains after the minutes were published, before turning higher once again.
Fed officials said the central bank should be on the lookout for excessive risk-taking, according to the minutes of a June 17-18 meeting, when policy makers trimmed monthly bond purchases to $35 billion. Officials are debating the timing for the first increase in the main interest rate since 2006. “Signs of increased risk-taking were viewed by some participants as an indication that market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy,” the minutes showed. Fed officials also expressed concern about low volatility in equity, currency and fixed-income markets, the minutes showed.
Equity losses in the previous two days have been concentrated in technology shares and small-caps with high valuations. Twitter Inc. and Pandora Media Inc., which trade at more than 150 times estimated earnings, plunged about more than 9%. Facebook Inc. and TripAdvisor Inc. sank at least 5.3%. More than 130 companies in the S&P 500 are scheduled to report quarterly results in the next two weeks, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs and Johnson & Johnson. Profit at S&P 500 companies probably rose 5% in the three months through June, while sales gained 3%, estimates compiled by Bloomberg show. The forecasts are lower than they were at the start of April, when analysts predicted a 7.3% rise in earnings and 3.7% sales increase.
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