Daily Insight: Interest rates and FOMC minutes

U.S. stock indices ended mixed on Tuesday as the S&P 500 and NASDAQ Composite gained some ground, while the Dow closed slightly lower; we’ll just have to wait for the third return to 11K in 10 years.

The broad market hovered around the cut line for most of the session as European government-debt concerns returned to hold sentiment back, but stocks caught a slight bid immediately following release of the FOMC minutes. (The FOMC is the Federal Reserve’s rate-setting committee and the minutes are the notes from their most recent meeting.)

The Fed talked about how they believe a lingering high jobless rate will curb the recovery and also trimmed their GDP estimates along with their inflation expectations. Traders heard that and read: ultra easy money will continue.

Stocks would have probably recorded a more substantial rise if not for renewed debt concerns in Europe – we’ve talked about how this issue isn’t going away. Right now the Greek government doesn’t like the fact that the IMF is involved, which means they’ll really (as opposed to just the old nod to EU officials) have to rein in spending. As a result, no one is totally sure there is a financial-aid package for Greece in place. Of course Germany and France, the two strongest economies within the Eurozone, will ultimately backstop Greece’s financial needs, but the issue is a bit more precarious than it was at least perceived to be just a week ago.

Financial, utility and basic material shares were among the six of the 10 major sectors that closed higher on the session. Telecom shares led the three sectors that fell; industrials ended the session flat.

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Brent Vondera, Senior Analyst