U.S. stocks pared early losses to close higher on Wednesday, as investors digested U.S. Federal Reserve minutes and a slew of economic data.
The Dow Jones Industrial Average was up 78.00 points, or 0.44 percent, to 17,918.62. The S&P 500 gained 11.18 points, or 0.54 percent, to 2,099.73. The Nasdaq Composite Index rose 36.26 points, or 0.75 percent, to 4,859.16.
Fed policymakers decided in June that it was prudent to wait for more data and the Brexit vote result before raising rates, according to the minutes of the Fed's June policy meeting released on Wednesday. The June Fed minutes will be perused for indications of the Fed' s concerns over recent weakness in the U.S. economy and the Brexit referendum, said Chris Low, chief economist at FTN Financial, Wednesday.
On the economic front, U.S. goods and services deficit was 41.1 billion U.S. dollars in May, up 3.8 billion dollars from a revised reading in April, the Commerce Department said Wednesday. The seasonally adjusted Markit Flash U.S. services PMI Business Activity Index registered 51.4 in June, slightly higher than market consensus of 51.3. The U.S. non-manufacturing index registered 56.5 percent in June, 3.6 percentage points higher than the May reading of 52.9 percent, the Institute Supply Management reported Wednesday. This represents continued growth in the non-manufacturing sector at a faster rate.
"The U.S. economy is not out of the woods yet, of course, but a resurgent service sector heading into Q3 should boost confidence that the economy can withstand current volatility," said Jay Morelock, an economist at FTN Financial, in a note.
Meanwhile, traders will keep a close eye on Friday's nonfarm jobs report this week for more clues on the central bank's next rate hike.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, decreased 3.98 percent to end at 14.96 on Wednesday.
U.S. stocks closed lower on Tuesday, snapping a four-session winning streak, as Wall Street shifted its focus from Brexit to the uncertainty over the timing of a next rate hike.
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