U.S. equities finished higher Wednesday as investors digested upbeat earnings results and the release of the minutes from the Federal Reserve’s July meeting. The Dow added 240 points, while the S&P 500 gained 0.8%. The Nasdaq Composite advanced 0.9%.
All 11 S&P 500 sectors finished in positive territory with Consumer Discretionary stocks pacing the gains. Target shares surged 19.1% to a fresh record high as a spike in digital sales helped the company exceed Wall Street profit and revenue estimates. Lowe’s was another standout, jumping 10.3% after the home improvement retailer posted robust same-store-sales growth. Toll Brothers topped consensus earnings estimates, but shares slid 4.6% after the luxury homebuilder revealed tepid demand for high-end homes.
Treasuries moved lower to send the yield on the benchmark 10-year note up four basis points to 1.59% following the publication of the FOMC minutes. The minutes showed that Fed members viewed July’s interest rate cut as part of an “ongoing reassessment” of monetary policy in the wake of slowing global growth, risk management concerns, and persistently low inflation. Prior to market close, the spread between the two-year Treasury note and ten-year Treasury note briefly inverted for the second time in two weeks.
On a the data front, a report this morning showed mortgage applications dipped 0.9% in the most recent week after jumping 21.7% in the prior period. A separate update revealed existing home sales rebounded 2.5% in July to a five-month high. In commodities, WTI crude dropped 0.5% to $55.85/barrel, following an uptick in U.S. inventories. COMEX gold finished flat at $1,504.60/ounce.