Achieving Trading Equilibrium: 8 Jan 2014 AMC - Stocks End Mixed on FOMC Minutes release and ahead of Unemployment Claims

Market Summary

The major averages ended the Wednesday session on a mixed note as the Nasdaq added 0.3%, the Dow shed 0.4% while the S&P 500 essentially split the difference, ending flat.

Equity indices began the session on a lower note, but the Nasdaq and S&P 500 staged swift rallies to new highs. The two indices hovered near their best levels of the session for the remainder of the trading day, but tested their lows during the final hour. For its part, the Dow Jones Industrial Average was unable to eclipse its morning high as 20 of its 30 components registered losses.

Prior to the open, it was reported that private sector employment increased by 238,000 in December while the Briefing.com consensus expected a reading of 203,000. The strong report was received by the bond market as a sign suggesting the Fed could engage in additional tapering sooner rather than later. On that note, the December FOMC minutes revealed that some officials saw "waning benefits" from monthly bond purchases. Furthermore, some members wanted to see a quicker end to the asset purchasing program. Treasuries settled near their lows with the 10-yr yield up five basis points at 3.00%.

Six of ten sectors ended in the red with rate-sensitive consumer staples (-0.7%), telecom services (-1.7%), and utilities (-0.6%) leading the slide as higher yields weighed. The fourth defensive sector—health care (+0.9%)—finished in the lead with help from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 231.58, +4.65) jumped 2.1%, also contributing to the outperformance of the Nasdaq.

Outside of health care, financials (+0.3%), materials (+0.6%), and technology (+0.1%) were the only other advancers. The materials sector received support from chemical producers after Monsanto (MON 115.23, +2.12) beat on earnings and revenue.

Elsewhere, the technology sector ended flat with its relative strength providing a boost to the Nasdaq. Chipmakers rallied broadly after Micron (MU 23.86, +2.13) beat on earnings and revenue. Micron soared 9.9% while the broader PHLX Semiconductor Index rose 1.6%.

On the downside, the energy sector (-0.7%) was the weakest cyclical group as crude oil fell 1.4% to $92.32/bbl.

Today's session saw the most activity since December 20 as 743 million shares changed hands on the floor of the New York Stock Exchange.

Tomorrow, the December Challenger Job Cuts report will be released at 7:30 ET while weekly initial claims will be reported at 8:30 ET.