Global stocks fade from record highs, dollar falls on Fed minutes

Wed Feb 22, 2017 4:40pm EST
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By Richard Leong

NEW YORK (Reuters) - Global stocks pulled back from record highs on Wednesday while the dollar declined after minutes from the U.S. Federal Reserve offered little to support the notion of an interest rate increase in March.

The perceived less hawkish tone of the Fed's record of the Jan. 31-Feb. 1 policy meeting helped lift gold and U.S. bonds from negative territory. Oil futures ended lower on renewed concerns about rising U.S. inventories.

Many Fed policymakers said it may be appropriate to raise interest rates again "fairly soon" should jobs and inflation data come in line with expectations. But the minutes also showed uncertainty because of a lack of clarity on the new Trump administration's economic program.

"These minutes reflect this mindset of a moderate path. They don’t see a smoking gun for them to speed up. There’s way too much uncertainty about the content and timing on fiscal stimulus and their impact," said Robert Tipp, chief investment strategist at PGIM Fixed Income in Newark, New Jersey.

U.S. President Donald Trump's pledge of tax cuts, looser regulation and more infrastructure spending - together with relatively strong earnings seasons in Europe and the United States and upbeat economic data - have fueled a stock rally this year.

MSCI's main index of global stocks, which tracks share prices across 46 countries, hit a second successive record high at 446.60. It was last at 446.04.

On Wall Street, the Dow ended up 32.6 points, or 0.16 percent, at 20,775.6, the S&P 500 closed down 2.56 points, or 0.11 percent, at 2,362.82 and the Nasdaq Composite finished down 5.32 points, or 0.09 percent, to 5,860.63.

The Dow reached its ninth straight all-time closing high.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 22, 2017. REUTERS/Brendan McDermid