By Stephen Culp
NEW YORK (Reuters) - Wall Street had a mixed reaction on Wednesday after the expected interest rate cut by the U.S. Federal Reserve, the first in a decade, failed to impress investors.
After spending much of the session in wait-and-see mode ahead of the Fed's announcement, the S&P 500 and the Dow were essentially flat, with the Nasdaq slightly higher.
But all were on track to post their second straight monthly gains, closing the book on a month during which the S&P 500 and the Nasdaq reached fresh record highs.
Market participants were expecting the central bank to lower the Fed funds target rate by 25 basis points as insurance against signs of a looming economic slowdown amid the protracted U.S.-China trade war.
"It's smart of them to go ahead and take out some insurance here," said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida.
"Typically, the initial market reaction is only a knee jerk." Ewing added. "What is important to focus on right here is we will be waiting for the press conference and the dot plot and taking a look at their guidance."
Trade talks wrapped up in Shanghai, with U.S. and Chinese negotiators leaving the table without a deal. But both sides called the talks "constructive."
The Dow Jones Industrial Average <.DJI> fell 12.56 points, or 0.05%, to 27,185.46, the S&P 500 <.SPX> lost 0.02 points, or -0.00%, to 3,013.16 and the Nasdaq Composite <.IXIC> added 15.38 points, or 0.19%, to 8,289.00.
Of the 11 major sectors in the S&P 500, six were in the black, with real estate <.SPLRCR> and energy <.SPNY> suffering the largest percentage losses.
Second-quarter earnings season charges ahead, with 296 of the companies in the S&P 500 having reported. Of those, 74.7% have surprised Street estimates to the upside, according to Refinitiv data.
Analysts now see total growth of 1.3% for the quarter, up from just 0.3% seen at the beginning of the month, per Refinitiv.
Video game maker Electronic Arts Inc
Among losers, shares of General Electric Co
Chipmaker Advanced Micro Devices Inc
Molson Coors Brewing Co
On the economic front, The ADP National Employment Report, showed private employers added 156,000 jobs in July, 4,000 fewer than economists expect Friday's more comprehensive report from the U.S. Labor Department to show.
Advancing issues outnumbered declining ones on the NYSE by a 1.47-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favoured advancers.
The S&P 500 posted 32 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 105 new highs and 56 new lows.
(Reporting by Stephen Culp; additional reporting by Lewis Krauskoph; editing by Diane Craft)
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Updated Date: Aug 01, 2019 01:06:00 IST