U.S. stocks wavered in a tight range for the week after all three indices set new closing records Monday, as Wall Street digested the Federal Reserve's minutes from its July meeting and a strong rebound in oil prices amid economic data.
On Monday, U.S. stocks rallied, with all three major indices setting new closing records, boosted by a strong rebound in oil prices. On Tuesday, U.S. stocks retreated on profit-taking, as investors digested a batch of economic reports.
On Wednesday, U.S. stocks reversed early losses to end mildly higher, as Wall Street pondered over the newly-released Fed minutes.
On Thursday, U.S. stocks managed to end slightly higher after wavering in a tight range, amid remarks on rate hikes from New York Fed President William Dudley.
On Friday, U.S. stocks ended mildly lower as investors kept cautious amid hawkish remarks on rate hikes from Federal Reserve officials.
The Fed minutes were the spotlight of the week. According to the minutes released Wednesday afternoon, some voting Fed policymakers expect that a U.S. interest rate increase will be needed soon, although there is general agreement that more data is needed before such a move.
"The information reviewed for the July 26-27 meeting indicated that labor market conditions generally improved in June and that growth in real gross domestic product was moderate in the second quarter," said the minutes.
Meanwhile, New York Fed President William Dudley, a voting member of the Federal Open Market Committee, said Thursday that the past two jobs reports "helped allay concerns that arose earlier this year that job growth was beginning to stall. Indeed, these reports reinforce my view that labor market conditions continue to improve."
San Francisco Fed President John Williams also signaled support for a rate hike in the near future in a Thursday afternoon speech. Atlanta Fed President Dennis Lockhart said earlier this week that there could be one or two rate increases this year. "On balance traders see a reduced risk of rate hikes (after the release of the minutes), especially compared to yesterday when Dudley warned the market odds were too low. As much as some at the Fed would like to hike, there are just too many potential pitfalls to carry a majority in September," said Chris Low, chief economist at FTN Financial.
Oil prices were also in focus, which fluctuated narrowly Friday after recent solid gains. Both U.S. oil and Brent crude have risen about 15 percent in the last seven sessions on speculation that Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) will agree next month to a production freeze deal with non-OPEC members led by Russia.
On the economic front, U.S. builder confidence in the market for newly constructed single-family homes in August rose 2 points to 60 from a downwardly revised reading of 58 in July on the National Association of Home Builders/Wells Fargo Housing Market Index.
The U.S. Consumer Price Index (CPI) for all urban consumers was unchanged in July on a seasonally adjusted basis, in line with market estimates. The index for all items less food and energy rose 0.1 percent in July, but posted its smallest increase since March.
U.S. privately-owned housing starts in July were at a seasonally adjusted annual rate of 1.211 million units, 2.1 percent above the revised June estimate.
U.S. industrial production increased 0.7 percent in July, beating market expectations of a 0.3-percent gain, after moving up 0.4 percent in June.
In the week ending Aug. 13, the advance figure for seasonally adjusted initial claims was 262,000, a decrease of 4,000 from the previous week's unrevised level of 266,000.
For the week, the Dow fell 0.1 percent, and the S&P 500 edged down 0.18 point, or less than 0.1 percent, while the Nasdaq rose 0. 1 percent.
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