US stocks open mildly higher ahead of Fed minutes

Brendan McDermid | Reuters Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

U.S. stocks opened near the flatline on Wednesday amid a weaker dollar as investors awaited the Federal Reserve’s meeting minutes.

“Today we’re going to be trading in advance of the FOMC minutes. I expect a sort of listless market,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “Again we have this information void that gives investors little impetus to get out in front of it.”

The key report for the day is the 2:00 p.m. publication of the Federal Open Market Committee minutes of the March meeting, when the Fed dropped “patient” from its statement as an indication it is setting up for normalization of monetary policy. However, the overall tone of the minutes is expected to remain dovish.

Fed Chair Janet Yellen maintained in late March speech that the central bank will remain data-dependent.

Art Hogan, chief market strategist at Wunderlich Securities, said it will be “interesting to see how much debate (the committee) had over ‘patience’ and how much impact they think the strong dollar had on the U.S. economy.”

Analysts will watch weekly jobless claims on Thursday for indications on whether or not March’s disappointing labor report was pressured by one-time factors.

A Federal Reserve governor, Jerome Powell, said Wednesday morning that the central bank needs “more proof” that the job market is tightening.

Read More Volatile oil, a dovish Fed, and start of earnings

Stocks also have a “halo” effect from merger and acquisition news in the energy sector, Hogan said.

European energy stocks surged following news that Royal Dutch Shell will buy BG Group for $70 billion in cash and stock in the first major oil company takeover deal since Chevron bought Texaco for $36 billion in 2000.

Oil prices fell more than a percent after data from the American Petroleum Institute (API) showed U.S. crude stocks surged 12.2 million barrels last week against analyst expectations for an increase of 3.4 million barrels.

The decline in oil follows a rally on Monday and Tuesday, when U.S. crude approached 2015 highs. Brent May crude was down 1.5 percent to just above $58 a barrel in morning trade, and U.S. May crude dropped about 2 percent to below $53 a barrel.

Stable prices bring more predictability, Luschini said. Oil “volatility could be unwelcome for the market.”

The U.S. dollar declined against major world currencies, with the euro slightly near $1.08. The U.S. 10-year Treasury note yield was 1.89 percent, ahead of an auction at 1:00 p.m.

U.S. stocks faded in the close on Tuesday to end mildly lower, breaking two days of gains.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 17928.23
52.81 0.30%
S&P 500 S&P 500 Index 2081.53
5.20 0.25%
NASDAQ Nasdaq Composite Index 4929.15
18.92 0.39%

Total mortgage application volume rose 0.4 percent week-to-week on a seasonally adjusted basis for the week ending April 3, according to the Mortgage Bankers Association (MBA). The move was driven entirely by a 7 percent surge in applications by homebuyers

The only other major economic news for the day are weekly oil inventories and a 10-year note auction.

Family Dollar reported earnings that missed on both the top and bottom lines.

Alcoa kicks off corporate earnings season, with its first quarter earnings expected after the closing bell, when Bed Bath & Beyond also reports. Earnings season gets into full swing next week when major banks and technology companies report.

“We think the market is set up to rally in response to earnings because overbought conditions are uncommon and breakdowns are few,” BTIG chief technical strategist Katie Stockton in a note. “A positive catalyst would come from a breakout above the upper boundary of the intraday trading range, around 2089 for the SPX.”

The initial Apple Watch reviews came out mostly positive on Wednesday morning.

Tesla announced an upgrade of its flagship Model S, featuring a larger battery pack and all-wheel drive.

Walt Disney and IMAX have renewed their movie exhibition deal, covering releases from Disney, Pixar, Marvel, and Lucasfilm.

Read More Early movers: RDSA, TSLA, MRK, RAD, DLTR & more

Oil and gas exploration and production company Noble Energy will cut about 220 positions, about half at Noble’s Colorado operations.

The Dow Jones Industrial Average opened up 47 points, or 0.27 percent, at 17,922, with McDonald’s leading gains and Apple the greatest of five blue chip laggards.

The S&P 500 opened up 6 points, or 0.29 percent, at 2,082, with consumer discretionary leading eight sectors higher and utilities and telecommunications the only laggards.

The Nasdaq opened up 15 points, or 0.31 percent, at 4,925.

Advancers were a step ahead of decliners on the New York Stock Exchange, with an exchange volume of 53 million and a composite volume of 145 million in the open.

Crude oil futures fell $1.49, or 2.78 percent, at $52.49 a barrel on the New York Mercantile Exchange. Gold futures fell $2.00, or 0.17 percent, at $1,208.60 an ounce in the open.

CNBC’s Peter Schacknow contributed to this report.

On tap this week:

Wednesday

Earnings: Alcoa, Bed Bath and Beyond, Pier 1 Imports

10:00 a.m.: New York Fed’s Dudley on economy

1:00 p.m.: $21 billion 10-year note auction

2:00 p.m.: FOMC minutes

Thursday

Earnings: Walgreen Boots Alliance, Constellation Brands, Ruby Tuesday, PriceSmart

8:30 a.m.: Initial claims

10:00 a.m.: Wholesale trade

1:00 p.m.: $13 billion 30-year auction

Friday

8:30 a.m.: Import prices

8:45 a.m.: Richmond Fed President Jeffrey Lacker on economic outlook

12:20 p.m.: Minneapolis Fed’s Kocherlakota

2:00 p.m.: Federal budget

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