US close: Stocks rally as Fed caution vindicated and oil rebounds

US stock markets recovered from early Wednesday wobbles to recoup most of the week's losses so far as minutes from the Federal Reserve's latest policy meeting indicated there would be no rate hike until markets simmered down and domestic data strengthens.

The Dow Jones Industrial Average stood 0.44% higher at 17,918.62 by the close, with the S&P 500 up 0.54% at 2,099.73 and the Nasdaq was up 0.75% at 4,859.16.

Earlier as stocks slid, benchmark Treasury yields wallowed around record low of 1.357% from the prior day, while the price of gold showed steel as investors flock to perceived safe havens.

After an initial dip, oil was back up above $47, with front-month West Texas Intermediate rising 2.7% at $47.86 a barrel by home time on Wall Street, with Brent Crude also 2.7% higher to $49.23.

The dollar was up 0.8% as the pound was again roughed up to almost £0.774, but down 0.2% versus the euro at €0.901 and down 0.4% on the yen at 101.32.

The rate-setting Federal Open Market Committee was divided in its opinion but was shown to have played it safe in its 14-15 June meeting, 10 days before the result of the crucial European Union referendum across the Atlantic that has since proved a catalyst for considerable market turmoil.

"Members generally agreed that, before assessing whether another step in removing monetary accommodation was warranted, it was prudent to wait for additional data on the consequences of the UK vote," the minutes read, while views were split on the interpretation of payroll data from April and May, and on the likelihood of inflation rising.

As at the April meeting, the FOMC set three conditions for an interest rate hike: a pickup in economic growth, employment growth sufficient to reduce unemployment, and inflation likely to rise to 2% over the medium term.

Many analysts see December as the likely date for a hike, though some even see this being pushed back.

"The minutes support our view that the FOMC is now taking a wait-and-see approach to assess the employment growth slowdown, the impact of Brexit and the sustained decline in business investment," said Rabobank's US strategist Philip Marey. "If the economy continues to grow despite the stronger headwinds, slack in the labor market will continue to fall and the FOMC may want to squeeze in a rate hike before the end of the year.

He added that though he was still eyeing a December hike "the risk that the Fed will have to wait until next year has increased considerably. In fact, a few more setbacks could even force the FOMC to take a pause in its ‘hiking cycle’ altogether."

But Barclays sees liftoff sooner: "If the labor market firms (as per our baseline forecast), they are likely to hike in September (our baseline expectation). If the labor market remains soft or deteriorates further, the FOMC will be unlikely to hike in September."

Earlier, US services sector activity rallied in June, according to the widely-followed purchasing managers' index (PMI) survey from the Institute for Supply Management (ISM). The ISM PMI rose to 56.5 from 52.9, beating the forecast reading of 53.3. A gauge of firms' new orders rose from 54.2 to 59.9, alongside another tracking employment improving from 49.7 to 52.7.

The US May trade deficit data ahead of the opening bell, with the figure widening to $41.1bn against $37.4bn in the prior month.

Among companies, pharmacy giant Walgreens Boots Alliance posted quarterly earnings, with net earnings jumping 14.7% year-on-year to $1.3bn in the three months to 31 May.

The company also reported adjusted diluted earnings per share of $1.18 on net sales of $29.5bn - more or less in line with analyst forecasts.

Investors are also looking to Friday’s non-farm payrolls as the next big data event.

S&P 500 - Risers
Carmax Inc. (KMX) $50.42 +5.57%
Martin Marietta Mtrl (MLM) $194.89 +4.35%
Celgene Corp. (CELG) $104.60 +4.34%
Nucor Corp. (NUE) $51.07 +4.31%
Edwards Lifesciences Corp. (EW) $103.45 +3.83%
Vertex Pharmaceuticals Inc. (VRTX) $89.66 +3.64%
Freeport-McMoRan Inc (FCX) $10.88 +3.62%
Southwestern Energy Co. (SWN) $12.07 +3.52%
Abbott Laboratories (ABT) $40.82 +3.50%
Regeneron Pharmaceuticals Inc. (REGN) $371.57 +3.33%

S&P 500 - Fallers
Marathon Petroleum Corporation (MPC) $36.49 -5.91%
Tesoro Corp. (TSO) $71.14 -5.07%
Netflix Inc. (NFLX) $94.60 -3.38%
United Continental Holdings Inc. (UAL) $39.29 -2.48%
Valero Energy Corp. (VLO) $48.66 -2.37%
National Oilwell Varco Inc. (NOV) $31.48 -2.05%
Frontier Communications Co. (FTR) $4.88 -2.01%
American Airlines Group (AAL) $28.35 -2.00%
Phillips 66 Common Stock (PSX) $76.37 -2.00%
Church Dwight Co Inc. (CHD) $101.28 -1.99%

Dow Jones I.A - Risers
Merck & Co. Inc. (MRK) $59.15 +1.98%
Home Depot Inc. (HD) $131.56 +1.71%
Cisco Systems Inc. (CSCO) $28.72 +1.38%
Exxon Mobil Corp. (XOM) $94.09 +1.15%
JP Morgan Chase & Co. (JPM) $60.20 +1.09%
Nike Inc. (NKE) $55.79 +1.08%
Wal-Mart Stores Inc. (WMT) $73.84 +0.96%
Chevron Corp. (CVX) $104.55 +0.95%
General Electric Co. (GE) $31.74 +0.92%
Intel Corp. (INTC) $32.97 +0.89%

Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $61.87 -1.73%
Visa Inc. (V) $74.12 -0.74%
Verizon Communications Inc. (VZ) $56.25 -0.50%
Procter & Gamble Co. (PG) $85.03 -0.48%
Coca-Cola Co. (KO) $45.25 -0.40%
3M Co. (MMM) $175.11 -0.30%
McDonald's Corp. (MCD) $120.61 -0.12%
Boeing Co. (BA) $126.93 -0.03%

Nasdaq 100 - Risers
Celgene Corp. (CELG) $104.60 +4.34%
Vertex Pharmaceuticals Inc. (VRTX) $89.66 +3.64%
Incyte Corp. (INCY) $82.48 +3.48%
Regeneron Pharmaceuticals Inc. (REGN) $371.57 +3.33%
Endo International Plc (ENDP) $17.10 +3.26%
Bed Bath & Beyond Inc. (BBBY) $43.55 +3.05%
Alexion Pharmaceuticals Inc. (ALXN) $121.12 +2.96%
Whole Foods Market Inc. (WFM) $33.16 +2.63%
Facebook Inc. (FB) $116.71 +2.38%
Check Point Software Technologies Ltd. (CHKP) $81.63 +2.37%

Nasdaq 100 - Fallers
Netflix Inc. (NFLX) $94.60 -3.38%
Walgreens Boots Alliance, Inc. (WBA) $81.55 -2.36%
JD.com, Inc. (JD) $20.38 -2.30%
American Airlines Group (AAL) $28.35 -2.00%
Vodafone Group Plc ADS (VOD) $29.77 -1.52%
Micron Technology Inc. (MU) $11.73 -1.51%
Ctrip.Com International Ltd. Ads (CTRP) $40.22 -1.08%
Fiserv Inc. (FISV) $108.71 -0.66%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $40.30 -0.52%
Nxp Semiconductors Nv (NXPI) $76.05 -0.51%