Shares were slightly lower on Wednesday, as investors appeared to be waiting for the minutes from the January meeting of the Federal Reserve’s Open Market Committee, which will be released in the afternoon.
Data released on Wednesday indicated that the economy continued to show modest improvement. Groundbreaking to build new homes in the United States fell 8.5 percent in January, but new permits for construction rose to a four-and-a-half-year high. In addition producer prices rose in January for the first time in four months.
The data should enable the Fed to maintain its easy monetary policy in its efforts to stimulate the economy.
“It’s hard in any given data point to take a strong conclusion that we are moving dramatically forward,” said Robert Lutts, chief investment officer at Cabot Money Management in Salem, Mass. “But over time, clearly things are getting better.”
Mr. Lutts described an economy that was addicted to stimulus.
“The bottom line,” he said, “is the economy is on heroin today and we will at one-time move to a diluted form of heroin, but it’s very important for people to remember we are still on an unbelievably aggressive, never-seen-before accommodative policy and this economy is going to improve.”
The Standard Poor’s 500-stock index is up 7.4 percent for the year, aided by legislators’ ability to sidestep automatic spending cuts, better-than-expected corporate earnings and modestly improving economic data that has been tepid enough for the Fed to maintain its stimulus policy.
In early trading on Wednesday, the S.P. 500 was down about 0.2 percent, while the Dow Jones industrial average was flat. The Nasdaq composite was 0.2 percent lower.
Devon Energy, an American oil and gas producer, reported a fourth-quarter loss as it wrote down the value of its assets by $896 million because of weak gas prices. Its shares were down about 1.1 percent.
Toll Brothers, the luxury homebuilder, lost 4.4 percent after it reported first-quarter results well below analysts’ estimates.
SodaStream dropped 4.2 percent after the seller of home carbonated drink maker machines posted fourth-quarter earnings and provided a 2013 outlook.
According to Thomson Reuters data through Tuesday morning, of the 391 companies in the S.P. 500 that have reported results, 70.1 percent have exceeded analysts’ expectations, compared with a 62 percent average since 1994 and 65 percent over the last four quarters.
Fourth-quarter earnings for S.P. 500 companies are estimated to have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
Article source: http://www.nytimes.com/2013/02/21/business/daily-stock-market-activity.html?partner=rss&emc=rss