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Dow, Other Indexes Reverse Lower After Fed Comments Douse Stocks | Stock News & Stock Market Analysis

The stock market faded in the final hour, making bearish price reversals after the Federal Reserve released details of its January meeting.

X The Nasdaq composite went from a gain of more than 1% to end the day 0.2% lower. The S&P 500 cut all its gains as it closed with a 0.5% decline.

The Dow Jones industrial average lost 0.7% and met resistance at the 50-day moving average for the second straight day. The S&P 500 also met some resistance at its 50-day average, although the Nasdaq is above its own 50-day line.

The indexes’ behavior around that line is one way to gauge the market’s short-term direction. A retreat below the line would be viewed as a negative sign. Another concern is that the main indexes have faded from early gains the past three sessions, in some cases making bearish price reversals like Wednesday’s.

Stocks were higher before the minutes of the Fed’s January meeting were released at 2 p.m. ET, then climbed even more once the details came out. But those additional gains vaporized less than an hour later, and selling continued into the closing bell.

The minutes showed Fed policymakers continued to back gradual interest rate hikes despite an improving economy. The central bank said “labor market conditions would strengthen further” but saw few signs of heavy wage pressures. Still, investors were alarmed by details in the minutes. The yield on the 10-year Treasury note edged lower soon after the report, but then rose 4 basis points to 2.94%, a four-year high.

A breakout for Etsy (ETSY) faded along with the market. The crafts marketplace closed below the 21.96 buy point; volume ended about 30% more than average.

The Innovator IBD 50 Fund (FFTY) fared better than the broad market, adding 0.2%. Daqo New Energy (DQ) surged for a second straight day and appears to be shaping a new base.

Nvidia (NVDA) was uncharacteristically a laggard, down 3% on the day. But the graphics chips and artificial intelligence company remains near record highs. The Philadelphia semiconductor index fell 1.2% after being one of the best sector indexes Tuesday.

Dow component Merck (MRK) announced it will acquire Australian biotech Viralytics in a $394 million deal. Merck remains in a steep downtrend and had no real bearing on the Dow’s performance Wednesday.

Small caps bucked the selling, with the Russell 2000 up 0.1% at the closing bell.

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