US stocks closed lower on Wednesday in a rocky session after concerns about higher interest rates resurfaced following the release of minutes from the Federal Reserve’s January meeting.
The Dow Jones Industrial Average fell 168 points, or 0.67%, to 24,797, the S&P 500 lost 15 points, or 0.55%, to 2,701 and the Nasdaq Composite dropped 16 points, or 0.22%, to 7,218.
All three benchmarks gave up early gains in a steep reversal in the afternoon, about an hour before the regular trading session ended and an hour after the FOMC minutes were released.
The minutes pointed to a strong economy, but also the “increased likelihood” of more rate hikes ahead. Higher rates can lure money out of equities and increase borrowing costs for corporations. The news pushed the US dollar higher and sent the yield for the 10-year Treasury note to a fresh four-year peak of 2.95%.
“Rising rates, if the rates go up far enough, could be a problem not just for the stock market but for the economy,” said Bruce Bittles, chief investment strategist at Baird.
Banks were the biggest beneficiaries of the Fed decision as they took the expectation of more rate increases amid a stronger economic landscape as bullish.
Walmart Inc. fell 2.8%, extending a sharp selloff on Tuesday, in the wake of the retail king’s quarterly earnings report.
Owens Corning fell 4.8% despite reporting fourth-quarter earnings that beat expectations. Pay-TV giant Dish Network Corp. lost 3.1% after it reported a drop in its fourth-quarter revenue.
Devon Energy Corp. sank 12% after it reported fourth-quarter results that missed expectations and gave a downbeat outlook.
Foot Locker Inc.’s stock rose 0.5% after the retailer late Tuesday announced a hike in its dividend and a spending plan focused on online initiatives.
Shares in LendingClub Corp. tumbled 5.6% after the lender late Tuesday posted quarterly results that missed expectations.
In Asia, share markets were mixed in morning trade on Thursday, after a lower finish in US stocks following the release of the latest Fed minutes.
Australia's ASX 200 opened higher but retraced gains to trade down 0.21%. Japan's Nikkei 225 was down 1.4% while the Topix index was lower by 1.18%. In South Korea, the Kospi slipped 0.56%.
Chinese mainland markets returned to trade after being shut for the Lunar New Year holidays. The Shanghai composite rose 1.31%. Elsewhere, Hong Kong's Hang Seng index was down 1.48% and Taiwan's Taiex fell 0.82%.