Market Snapshot: U.S. stocks slightly higher in midday trading as investors assess economic data, await Fed minutes

What’s driving markets?

Stocks were steady on Wednesday morning, attempting to follow up on Tuesday’s gains, which were in part driven by ongoing hopes that the Federal Reserve will slow the pace at which it is raising interest rates. During the midday trading session, three major indexes were mostly in the green with the exception of the Dow Jones Industrial Average, which struggled for direction.

November’s meeting minutes, due at 2 p.m. Eastern, will be watched closely for clues as to how high the fed-funds rate needs to go and how long it will stay there in order to bring inflation under control. The Fed hiked its benchmark rate by 75 basis points to a range of 3.75% to 4% at its meeting earlier this month.

See: What stock-market investors will be looking for in the Fed minutes

“Investors may be on the hunt for clues that they’ve acted prematurely, or that there’s actually more support for such a slowdown in tightening and less for a higher terminal rate than they previously thought,” said Craig Erlam, senior market analyst at OANDA, in a note to clients.

In U.S. economic data, U.S. durable-goods orders rose 1% in October while jobless benefit claims rose 17,000 to 240,000 in the latest week, the highest level since August. Meanwhile, the S&P Global flash U.S. services purchasing managers indexes in November dropped to 46.1 from 47.8. S&P Global flash U.S. manufacturing purchasing managers indexes in November fell to 47.6 from 50.7. Any number below 50 reflects a contracting economy.

The University of Michigan’s final November consumer sentiment index fell in November to 56.8 and remained depressed, reflecting concerns about high inflation and the increasing possibility of a recession.

U.S. new home sales advanced 7.5% to a seasonally-adjusted annual rate of 632,000 in October from a revised 588,000 in the prior month, the Commerce Department reported Wednesday. 

“Whether or not sales stabilize at this pace remains to be seen, but this could be an early indicator of the housing market bottoming out at least as far as the pace of sales go,” said Isfar Munir, an economist at Citigroup in New York. “New home sales are only 10% of housing sales in the U.S. though, and we cannot draw this conclusion until existing home sales also show more evidence of stabilizing.”

Munir and his team also argued that the increase in new home sales runs counter to the drop reported in housing starts, since the increase all came from homes that had not yet been started. “While housing starts are a bit of a forward looking indicator for home sales, they have been falling for the last several months, all of which implies a downtrend in new home sales.”

U.S. stock exchanges will be closed for Thanksgiving Day on Thursday, Nov. 24, and reopen the next day only for a shortened session on Black Friday, the annual end-of-year shopping event, with trading ending at 1 p.m. Eastern on Nov. 25.

Read: This isn’t a ‘close your eyes and buy anything’ kind of market

Bond yields were holding steady, with that of the 10-year Treasury note
TMUBMUSD10Y,
3.738%
trading around 3.728% and the 2-year
TMUBMUSD02Y,
4.500%
at 4.505%.

The spread between 2- and 10-year Treasury yields ended Tuesday’s session at minus 76 basis points, the most inverted since Oct. 5, 1981, which some say points to an inevitable recession.

Elsewhere, oil prices
CL.1,
-4.19%
were modestly lower, while natural-gas futures
NG00,
+3.15%
climbed 8% to $7.982 per million British thermal units, with European natural-gas futures also surging after Russian energy giant Gazprom threatened to cut deliveries through a Ukraine pipeline to Europe. Markets are also waiting on news of an agreement between the U.S. and its allies over a price cap on Russian oil.

Companies in focus

• Nordstrom
  JWN,
  -4.02%
  dropped after the retailer swung to a surprise quarterly loss and joined other stores in reporting lower sales, saying it was “right-sizing” its inventory.

• Deere
  DE,
  +4.86%
  rose toward a seven-month high after the agriculture, construction and forestry equipment maker reported fiscal fourth-quarter sales that were well above expectations, and provided an upbeat full-year outlook.

• Citigroup C stock dropped after the bank was told it must address weaknesses in its management of financial data by U.S. banking regulators.

• Manchester United’s 
  MANU,
  +17.94%
  stock climbed 17% on Wednesday after the club’s owners confirmed they are exploring potential financial investment or an outright sale of the storied Premier League club.

• HP Inc.
  HPQ,
  +1.60%
  shares went down 0.9% Wednesday after the company’s executives on Tuesday announced plans to cut up to 10% of their workforce in the coming years while issuing weaker-than-expected earnings guidance.

• Credit Suisse
  CSGN,
  -6.12%
  shares fell 5.5% Wednesday after the bank’s shareholders overwhelmingly approved a plan to raise 4 billion francs ($4.2 billion) on Wednesday. In two votes, shareholders backed a plan for a private placement as well as a rights offering of discounted shares. 

— Barbara Kollmeyer contributed to this article