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Wall Street pares losses, gyrates after release of Fed minutes

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, February 15, 2022. REUTERS / Brendan McDermid

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  • Fed minutes released
  • ViacomCBS plunges on profit miss
  • US retail sales jump in January
  • Indexes down: Dow 0.26%, S&P 0.10%, Nasdaq 0.48%

NEW YORK, Feb 16 (Reuters) – Wall Street bounced off session lows and seesawed on Wednesday after the US Federal Reserve released the minutes from its most recent monetary policy meeting, which showed the while the central bank intends to start raising interest rates to combat inflation, it will make such decisions on a meeting-by-meeting basis.

All three major US stock indexes spent the session in negative territory, with tech shares (.SPLRCT) weighing heaviest, as investors contended with shifting geopolitical tensions and a raft of data suggesting the US economy is heating up, thereby bolstering the Federal Reserve’s case for aggressive rate tightening.

“There are a lot of crosswinds going around with Russia-Ukraine tensions, but from a domestic macro environment, the key variable driving equities is whether the Fed will increase (interest) rates by 50 basis points in March,” said Huw Roberts, head of analytics and Quant Insight in London. “The Fed would probably prefer to prepare the market a little bit and one way to do that is a more hawkish set of minutes.” read more

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A swath of economic data on Tuesday showed a sharp rebound in retail sales, stronger than expected industrial output, and core import prices reaching an all-time high. read more

“Today’s data has come out on the side of the hawks at the (Federal Open Market Committee),” Roberts added. “Today’s equity market reaction tells you the data today has the market fearful of a 50 basis point interest rate hike.”

The United States and NATO are still concerned about Russian troops near the Ukrainian border, challenging Russia’s claim on Tuesday that it was withdrawing troops and questioning President Vladimir Putin’s stated desire to negotiate a diplomatic solution to the crisis. read more

The Dow Jones Industrial Average (.DJI) fell 90.29 points, or 0.26%, to 34,898.55, the S&P 500 (.SPX) lost 4.6 points, or 0.10%, to 4,466.47 and the Nasdaq Composite (.IXIC) dropped 68.48 points, or 0.48%, to 14,071.28.

Among the 11 major sectors in the S&P 500, tech shares were suffering the largest percentage drop. Energy was the clear winner, benefiting from rising crude prices, due to supply concerns arising from Russia-Ukraine tensions.

Shares of ViacomCBS tumbled 19.1% after the media conglomerate missed quarterly profit expectations. read more

Short-term rental company Airbnb (ABNB.O) advanced 5.4% following its better-than-expected first-quarter revenue forecast, driven by a strong rebound in travel demand. read more

Devon Energy Corp (DVN.N) gained 7.7% after the oil producer reported fourth-quarter results above Wall Street estimates. read more

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Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing by Maju Samuel and Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

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