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Stocks - Dow Ends Higher as Materials Rally; Fed Set to Continue Pause

Investing.com - Wall Street closed higher Wednesday as the minutes from the Federal Reserve's January meeting suggested the central bank would continue to hold off on rate hikes amid concerns over international trade and slowing domestic growth.

The Dow Jones Industrial Average rose 0.24%, the S&P 500 added 0.18%, while the Nasdaq Composite tacked on 0.03%.

The release of the minutes triggered volatile action in stocks as investors attempted to weigh up the Fed's somewhat downbeat outlook on the U.S. economy against its dovish stance on monetary policy.

"Participants noted that maintaining the current target range for the federal funds rate for a time posed few risks at this point," the minutes said. "The current level of the federal funds rate was at the lower end of the range of estimates of the neutral policy rate."

The Fed flagged "softening in consumer or business sentiment" and "a reduction in the outlook for foreign economic growth" as headwinds to tightening monetary policy.

On the balance sheet, the minutes showed that "(a)lmost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve’s asset holdings later this year."

In the height of financial crisis the Fed bought government and mortgage bonds to boost the economy. But it has allowed as much as $50 billion a month of maturing securities to roll off its balance sheet as part of plan to reduce its balance sheet.

Beyond monetary policy, materials stocks also propped up the market amid growing expectations an escalation in the U.S.-China trade war will be averted when the current truce expires on March 1.

CF Industries Holdings (NYSE:CF), Mosaic (NYSE:MOS) and DowDuPont (NYSE:DWDP), which are sensitive to rising raw materials costs brought on by U.S. tariffs imposed on Chinese imports, rose sharply.

President Donald Trump hinted Tuesday that the March. 1 trade deadline was not set in stone, saying it was not a "magical" date.

Health care stocks were pressured by a plunge in CVS Health (NYSE:CVS) after it was punished for delivering results that missed on top line. Full-year guidance for earnings per share and revenue also fell short of estimates, with company expecting 2019 to be a year of "transition" as it seeks to integrate Aetna (NYSE:AET).

For 2019, CVS forecasts adjusted earnings in a range of $6.68 to $6.88 per share, below the $7.41 per share analysts polled by Refinitiv had expected.

Healthcare stocks fell 0.13%.

Garmin (NASDAQ:GRMN) proved a bright spot for corporate earnings as it topped estimates from Investing.com on both the top and bottom lines, supported by higher demand for its smartwatches and navigation systems.

Top S&P 500 Gainers and Losers Today:

Garmin (NASDAQ:GRMN), Devon Energy (NYSE:DVN) and Host Hotels & Resorts (NYSE:HST) were among the top S&P 500 gainers for the session.

CVS (NYSE:CVS), Concho Resources (NYSE:CXO) and Southwest Airlines (NYSE:LUV) were among the worst S&P 500 performers of the session.

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