U.S. stocks erased losses as minutes from the Federal Reserve’s last meeting showed many officials want to see further progress in the employment market before the central bank slows the pace of bond purchases.
Family Dollar Stores Inc. added 8% as the retailer’s earnings topped analyst estimates. Hewlett-Packard Co. rose 2.6% after Citigroup Inc. advised investors to buy the stock. Financial companies fell the most out of 10 S&P 500 groups as Bank of America Corp. and Wells Fargo & Co. slumped more than 1%. Nabors Industries Ltd. fell 6.1% after forecasting operating income below analysts’ estimates.
The Standard & Poor’s 500 Index rose 0.1% to 1,653.59 at 2:32 p.m. in New York, after falling as much as 0.3% earlier. The index rallied 2.4% in the previous four days as better-than-estimated employment data eased concern over a scaling back of Fed stimulus. The Dow Jones Industrial Average added 15.60 points, or 0.2%, to 15,315.94 today. Trading in S&P 500 stocks was 8.9% below the 30-day average at this time of day.
“Clearly the majority is still in the camp that says, ‘We may need to continue at this pace for a little bit longer,’” Scott Wren, the St. Louis, Missouri-based senior equity strategist at Wells Fargo Advisors LLC, which oversees about $1.3 trillion, said by telephone. “The market’s pretty convinced that the Fed’s not going to do anything to dramatically change the liquidity that they’re pumping into the system, and the minutes support that.”
Minutes from the central bank’s June 18-19 meeting, released today in Washington, showed that while several members judged that a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before they’ll begin slowing the pace of $85 billion in monthly bond purchases.
Fed officials met before the Labor Department’s jobs report for the month of June exceeded expectations, with the economy adding 195,000 jobs and the unemployment rate unchanged at 7.6%.
The U.S. benchmark has recovered following a 4.8% drop between June 19 and 24, triggered when Fed Chairman Ben S. Bernanke said the central bank may reduce its bond-buying this year and end the program in 2014 as economic risks subside. The index is up 16% for the year.