Fed minutes send stocks higher; Brent falls

By Rodrigo Campos

NEW YORK (Reuters) – Wall Street stocks rose on Wednesday, lifting a global equities gauge as the Federal Reserve detailed its plan to allow a strengthening economy to fend for itself, while Brent fell as Libyan oil pumps came back online.

Minutes from the most recent Fed meeting showed the U.S. central bank has begun detailing plans to ease the world’s largest economy out of an era of loose monetary policy, while its asset purchases will likely end in October.

Stocks on Wall Street traded higher after the release of the minutes, erasing about half the losses sustained in the previous two sessions.

“The market, after digesting the Fed minutes, came to the conclusion that the bond-buying program ending in October is a sign of economic strength,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “So while it was a bit more hawkish, the conclusion is the economy doesn’t need any more crutches.”

The Dow Jones industrial average rose 78.1 points or 0.46 percent, to 16,984.72, the S&P 500 gained 8.56 points or 0.44 percent, to 1,972.27 and the Nasdaq Composite added 25.72 points or 0.59 percent, to 4,417.18.

The FTSEuroFirst 300 index of leading European shares was flat on the day and MSCI’s global gauge of stocks edged up 0.2 percent.

European Central Bank President Mario Draghi’s London speech didn’t alter markets much, as he reiterated his message that the ECB is ready to use “unconventional instruments” if needed to support growth.

Brent crude oil hit a one-month low near $108 a barrel after a Libyan oilfield restarted and supply worries faded, while weekly data from the U.S. Energy Information Administration showed U.S. crude stockpiles rose and gasoline demand faltered.

“Gasoline demand didn’t grow as expected and that disappointment is showing in the negative reaction,” said Phil Flynn, analyst at Price Futures Group in Chicago.

Brent fell 0.6 percent to $108.29 and U.S. crude lost 1.2 percent, the most since late May, to $102.18.

The U.S. dollar fell 0.2 percent against a basket of currencies and the euro strengthened 0.2 percent versus the greenback.

Regarding the Fed minutes, any discussion by Fed members about a recent uptick in U.S. consumer prices will be key after Fed Chair Janet Yellen downplayed heating inflation data after the June meeting as being “noisy.”

“The characterization by Fed Chair Yellen of the inflation pop-up as noise really took the wind out of the sails of the near-term hawks,” said Steven Englander, global head of G10 foreign exchange strategy at CitiFX in New York.

The benchmark 10-year Treasury note yield was down slightly at 2.546 percent after the Fed minutes.

Upbeat U.S. employment data last week prompted some economists to predict the Fed would raise interest rates earlier than previously thought, but yields have since fallen.

Gold was up 0.7 percent at $1,328.20 an ounce.

(Additional reporting by Chuck Mikolajczak, Karen Brettell, Anna Louie Sussman and Richard Leong; Editing by James Dalgleish and Meredith Mazzilli)

Fed minutes send stocks higher; Brent falls