US close: Stocks end lower amid rate hike concerns

The Dow Jones Industrial Average ended down 0.5%, the S&P 500 fell 0.4% and the Nasdaq lost 0.6%.

Minutes from the latest Federal Open Market Committee meeting released on Wednesday revealed that an interest-rate hike in June was a possibility, with a number of participants already angling for an increase at the April meeting.

The key phrase in the minutes was that “most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labour market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2% objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June”.

“Market pricing still suggests a rate hike in June is unlikely, but the odds have improved significantly following the minutes,” said Jasper Lawler, market analyst at CMC Markets.

“The Fed is certainty aware of market expectations and by explicitly referencing June as a ‘live meeting’ are trying to massage them in the right direction. As is often the case with communications from the Fed, these minutes were an exercise in managing expectations.”

Meanwhile, comments from New York Fed President William Dudley added to concerns about a rate hike, as he said in a speech on Thursday that the US economy may be able to withstand a move on rates in June or July.

In addition, Fed Reserve Bank of Richmond President Jeffrey Lacker told Bloomberg Radio: “I certainly supported a rate increase at the April meeting.

“I think the case would be very strong for raising rates in June.”

In economic data, the Labor Department said the number of Americans filing for unemployment benefits fell a little less than expected last week. US initial jobless claims dropped by 16,000 to a seasonally-adjusted 278,000 from the previous week’s unrevised level. Economists had been expecting a slightly bigger decline to 275,000.

Manufacturing conditions in the Philadelphia region unexpectedly deteriorated further in May, according to the latest report from the Federal Reserve Bank of Philadelphia. The diffusion index for current activity fell to -1.8 from -1.6 in April. Economists had been expecting the index to move back into expansion territory with a reading of 3.5.

In corporate news, shares in seed giant Monsanto rallied after German pharmaceutical group Bayer confirmed it was in takeover talks with the US company.

Wal-Mart surged after reporting first quarter earnings and revenue that beat analysts’ estimates.

Dick’s Sporting Goods rose sharply despite posting a drop in first quarter profit as it achieved a rise in revenue that surpassed forecasts.

Oil prices settled in the red but off earlier lows, with West Texas Intermediate down 0.2% to $48.12 per barrel and Brent crude off 0.5% at $47.71 per barrel.

Earlier, the Energy Information Administration said US crude oil inventories rose 1.3m barrels to 541.3m barrels in the week ended 13 May, noting that this was a historical high for this time of the year.

The dollar slipped 0.1% against the pound and 0.2% versus the yen, but rose 0.2% against the euro, having gained earlier on rate hike expectations.

S&P 500 - Risers
Urban Outfitters Inc. (URBN) $28.01 +13.91%
Wal-Mart Stores Inc. (WMT) $69.20 +9.58%
Darden Restaurants Inc. (DRI) $65.90 +4.54%
Freeport-McMoRan Inc (FCX) $10.98 +4.17%
Salesforce.Com Inc. (CRM) $81.09 +4.14%
Monsanto Co. (MON) $100.55 +3.52%
ONEOK Inc. (OKE) $41.54 +3.51%
Williams Companies Inc. (WMB) $21.54 +3.41%
Cisco Systems Inc. (CSCO) $27.57 +3.18%
Range Resources Corp. (RRC) $39.95 +3.15%

S&P 500 - Fallers
Endo International Plc (ENDP) $14.77 -5.14%
Transocean Ltd. (RIG) $9.08 -5.12%
L Brands Inc (LB) $60.62 -4.95%
FMC Technologies Inc. (FTI) $27.30 -4.71%
Baxter International Inc. (BAX) $43.16 -4.26%
PACCAR Inc. (PCAR) $53.34 -3.42%
Paypal Holdings Inc (PYPL) $37.65 -3.41%
Alliance Data Systems Corp. (ADS) $205.44 -3.38%
First Solar Inc. (FSLR) $47.09 -3.33%
Borg Warner Inc. (BWA) $32.32 -3.32%

Dow Jones I.A - Risers
Wal-Mart Stores Inc. (WMT) $69.20 +9.58%
Cisco Systems Inc. (CSCO) $27.57 +3.18%
Nike Inc. (NKE) $57.04 +1.64%
Exxon Mobil Corp. (XOM) $90.11 +0.85%
E.I. du Pont de Nemours and Co. (DD) $64.41 +0.66%
Pfizer Inc. (PFE) $33.38 +0.63%
Procter & Gamble Co. (PG) $80.19 +0.43%

Dow Jones I.A - Fallers
Goldman Sachs Group Inc. (GS) $154.70 -3.28%
Boeing Co. (BA) $128.08 -2.22%
Caterpillar Inc. (CAT) $69.43 -1.64%
International Business Machines Corp. (IBM) $144.93 -1.64%
Verizon Communications Inc. (VZ) $49.63 -1.51%
American Express Co. (AXP) $62.74 -1.23%
Intel Corp. (INTC) $29.63 -1.20%
Travelers Company Inc. (TRV) $110.10 -1.08%
3M Co. (MMM) $165.11 -1.03%
JP Morgan Chase & Co. (JPM) $63.39 -1.01%

Nasdaq 100 - Risers
Cisco Systems Inc. (CSCO) $27.57 +3.18%
Kraft Heinz Co. (KHC) $83.00 +2.24%
Ross Stores Inc. (ROST) $55.52 +2.23%
Dollar Tree Inc (DLTR) $76.91 +2.10%
Tesla Motors Inc (TSLA) $215.21 +1.91%
Whole Foods Market Inc. (WFM) $30.86 +1.71%
Mattel Inc. (MAT) $30.31 +1.68%
Seagate Technology Plc (STX) $20.52 +1.38%
Tractor Supply Company (TSCO) $92.69 +1.23%
Costco Wholesale Corp. (COST) $142.70 +1.00%

Nasdaq 100 - Fallers
Endo International Plc (ENDP) $14.77 -5.14%
PACCAR Inc. (PCAR) $53.34 -3.42%
Discovery Communications Inc. Class C (DISCK) $25.10 -3.20%
Biomarin Pharmaceutical Inc. (BMRN) $84.75 -2.77%
Ctrip.Com International Ltd. Ads (CTRP) $42.67 -2.51%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $46.39 -2.50%
Alexion Pharmaceuticals Inc. (ALXN) $139.03 -2.32%
Discovery Communications Inc. Class A (DISCA) $26.10 -2.28%
Mylan Inc. (MYL) $41.12 -2.19%
Biogen Inc (BIIB) $258.72 -2.11%