The stock market rose for a third straight day on Wednesday despite a report from the Federal Reserve that showed a growing number of central bank officials are willing to raise interest rates sooner rather than later.
KEEPING SCORE: The Dow Jones industrial average rose 59.54 points, or 0.4 percent, to close at 16,979.13, acccording to preliminary figures. The Standard & Poor's 500-stock index rose 4.91 points, or 0.3 percent, to 1,986.51, putting it about one point below its all-time closing high. The Nasdaq composite index dipped 1.03 points, to 4,526.48.
RATE INCREASES: Some of the Fed's policymakers believe the economy is improving enough that the central bank should start considering how soon it is going to start raising interest rates, according to minutes from the Fed's latest meeting. Many analysts predict the Fed will start raising interest rates sometime in 2015.
The debate on when the Fed should raise interest rates, which have been near zero since 2008, has intensified in recent months as the central bank winds down its other economic stimulus programs. Later this week, the Fed's chairwman, Janet L. Yellen, will give a speech at the bank's annual conference in Jackson Hole, Wyo. The speech is often a venue where the leader of the Fed lays out major policy decisions.
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"Janet Yellen's speech in Jackson Hole will most likely guide the markets," Doug Cote, chief market strategist with Voya Investment Management, said.
INVESTORS PREPARED: The Fed has been winding down its bond-buying economic stimulus program since December, and is expected to end it completely before the end of the year. Despite worries that the Fed's exit might be a net negative for the market, stocks have remained resilient. The S.&P. 500 is up 7.5 percent this year.
Jonathan Corpina, a floor trader at the New York Stock Exchange with Meridian Equity Partners, said investors are prepared to see the Fed raise interest rates. "We've been talking about raising interest rates for so long, I don't think the Fed is going to surprise anybody when they finally do it," Mr. Corpina said.
BONDS REACT: The yield on the 10-year Treasury note rose to 2.43 percent from 2.40 percent the day before. The Fed's key short-term interest rate influences the prices of a huge array of investments, including Treasuries, other kinds of bonds and stocks. When the Fed finally raises interest rates, investors will demand higher yields on bonds.
PUPPY IN THE WINDOW PetSmart shares rose 82 cents, or 1.2 percent, to $70.52 after the company said it was exploring a possible sale. The pet supply retailer had been under pressure from activist investors to explore a possible sale, or to do a major restructuring.
IN A JAM J.M. Smucker shares fell $1.03, or 1 percent, to $102.42 after the food products company, which also owns coffee brands such as Folgers, cut its full-year sales outlook. The company also said higher coffee prices were affecting the company's profit margins.
CALL AAA Shares of Hertz fell $1.23, or 3.9 percent, to $30.33 after the rental car company withdrew its full-year profit forecast, citing numerous "operational challenges" related to auto recalls and accounting irregularities. The company said the Ford and G.M. recalls have hurt its ability to have cars available for customers. Hertz also said its purchase of Dollar Thrifty was not saving as much money as originally hoped.
NEEDS IMPROVEMENT While Lowe's did report a 10 percent rise in second-quarter profits, investors were more concerned about the company's forecast for the rest of the year. Lowe's cut its sales growth forecast for the year to 4.5 percent from 5 percent. In comparison, Home Depot raised its full-year outlook when it reported results Tuesday. Shares of Lowe's rose 81 cents, or 1.6 percent, to $52.33.
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