S&P 500, Dow edge lower ahead of Fed minutes

(Reuters) -The S&P 500 and the Dow inched lower in choppy trading on Wednesday as investors refrained from making big bets ahead of minutes from the Federal Reserve’s last meeting and sought clues on when the central bank might start winding down its economic support.

FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

Seven of the 11 major S&P sectors fell. In a change of direction, defensive healthcare, consumer staples, utilities and real estate shares led declines after rising sharply in the past few sessions.

Netflix Inc, Microsoft Corp , Google-owner Alphabet Inc and Tesla Inc , which led Wall Street’s rally from pandemic lows last year, helped the market offset some losses.

Banking stocks rose 0.2%, rebounding from a 3.3% fall in the last three sessions.

The S&P 500 consumer discretionary sector added 0.9%, boosted by Lowe’s Companies Inc, which jumped 10.3% after it forecast full-year sales above estimates on higher spending from builders and handymen getting back to housing projects.

U.S. stocks have managed to hit record highs in narrowly range-bound trading in August – a seasonally weak period for financial markets – as concerns about slowing U.S. growth and the spread of the Delta variant took the shine off a solid corporate earnings season.

The minutes of the Fed’s July 27-28 meeting, due at 2 p.m. ET (1800 GMT), will be closely watched especially after a stronger recovery in U.S. jobs market and a pickup in inflation well above the Fed’s 2% target.

“We’re starting to build this kind of cocktail, where you got the spread of the Delta variant, geopolitical and domestic political tensions, as well as kind of the Fed pulling back on some of their monetary policy,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.

“All together, and with a market that’s right around near all time highs, there’s reason for some volatility and choppiness and even a minor correction in the next couple of months.”

Analysts expect the Fed to announce its plan for a “taper” of its asset purchases as early as its Sept. 21-22 meeting.

Data on Wednesday showed U.S. homebuilding fell more than expected in July, the latest indication that surging construction costs and home prices continued to constrain the housing market early in the third quarter.

At 12:45 p.m. ET, the Dow Jones Industrial Average was down 81.25 points, or 0.23%, at 35,262.03, the S&P 500 was down 8.79 points, or 0.20%, at 4,439.29, and the Nasdaq Composite was up 5.77 points, or 0.04%, at 14,661.96.

Target Corp slipped 1.6% despite beating analysts’ estimates for same-store sales. The retailer’s stock has jumped about 44% year-to-date.

Earnings reports from online brokerage Robinhood Markets Inc, chipmaker Nvidia, network gear maker Cisco Systems Inc, lingerie brand Victoria’s Secret & Co and Bath & Body Works are due after market close on Wednesday.

Declining issues outnumbered advancers for a 1.15-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and one new low, while the Nasdaq recorded 37 new highs and 115 new lows.

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