US STOCKS-Wall St cuts data-driven gains ahead of Fed statement

Wed Jul 31, 2013 1:39pm EDT

* Investors focused on afternoon's Fed statement

* Dow pulls back from record intraday high

* Credit card companies' stocks plunge, then pare losses

* Shares of Herbalife climb on report George Soros has taken a stake

* Facebook trades above IPO price of $38 for first time since debut

* Dow up 0.1 pct; S&P up 0.2 pct; Nasdaq up 0.4 pct

By Alison Griswold

NEW YORK, July 31 (Reuters) - U.S. stocks held slim gains on Wednesday, pulling back from session highs after stronger-than-expected data on jobs and the economy, as investors waited for a Federal Reserve statement that could spell out the U.S. central bank's stimulus plans for the coming months.

The Fed's statement, due at 2 p.m. (1800 GMT) at the end of a two-day meeting, will be parsed for clues on when the central bank may begin to trim its $85 billion a month in stimulative bond purchases as the economic recovery takes hold. The Fed's stimulus is seen by many as central to the stock market's gain of nearly 19 percent so far this year.

U.S. gross domestic product growth unexpectedly accelerated in the second quarter at an annualized rate of 1.7 percent, and private-sector employers added 200,000 jobs in July, topping economists' expectations.

"It looks like this market wants to go higher. The GDP number that came out this morning was a big surprise," said Catherine Avery, president of Catherine Avery Investment Management in New Canaan, Connecticut.

"The big thing is: What's going to happen this afternoon when we get the Fed statements? Do we get a tapering? Do we not get a tapering?"

Six of the 10 S&P 500 industry sector indexes moved higher, with growth-sensitive cyclical shares leading the gains. The S&P 500 consumer discretionary index added 0.6 percent and the S&P 500 energy index rose 0.2 percent.

Comcast Corp gave the S&P 500 its biggest boost after the U.S. cable provider posted a higher quarterly profit on Wednesday, as it added more Internet customers than expected on the cable side and booked an increase of more than 20 percent in operating cash flow at its NBC Universal unit.

Credit card companies' shares plunged briefly in afternoon trading, with Visa shedding 8.9 percent in less than 25 minutes to hit a session low of $171.22. In the same period, Mastercard dropped 7.5 percent to a session low of $567.33 and Dow component American Express fell 1.8 percent.

The companies' stocks pared their losses over the next 20 minutes, with Visa down 3.4 percent at $185.01 and American Express off 1.3 percent at $74.25. Mastercard erased its losses and rose 1.5 percent to $610.05.

The Dow Jones industrial average gained 13.59 points, or 0.09 percent, to 15,534.18, off a record intraday high of 15,634.32 touched at about 10:38 a.m. The Standard & Poor's 500 Index added 3.37 points, or 0.20 percent, to 1,689.33. The Nasdaq Composite Index gained 12.94 points, or 0.36 percent, to 3,629.40.

The Nasdaq hit a nearly 13-year intraday high of 3,638.43 at about 10:50 a.m., according to a Thomson Reuters chart.

Shares of Herbalife shot up 9.6 percent to $65.78 after CNBC reported that billionaire George Soros has taken a large long position in the nutritional supplement company, citing sources on the matter. Herbalife's stock jumped as high as $66.25 on the report, its highest price since May 2012.

The S&P 500, up 5.5 percent so far in July, is on track for its biggest monthly percentage gain since October 2011.

Facebook Inc's stock traded above its initial public offering price of $38 for the first time since its market debut in May 2012, a milestone for the stock and a chance to erase Wall Street's early skepticism about the social networking company. The stock rose as high as $38.31, but then gave up its gains. In early afternoon trading, Facebook's stock fell 2.5 percent to $36.67.

Air Products & Chemicals shares gained 3.4 percent to $109.17 after activist investor William Ackman said his Pershing Square Capital Management has acquired a 9.8 percent stake in the industrial gas producer.

Symantec shares rose 8.4 percent to $26.39 a day after the maker of Norton anti-virus software posted better-than-expected quarterly results as customers used more of its security products in the wake of a series of hacking attacks.

With quarterly results in from 66 percent of the S&P 500 companies, 67.7 percent have exceeded earnings expectations - in line with the average beat over the last four quarters. About 56 percent of companies have topped revenue expectations, more than the 48 percent of revenue beats in the past four earnings seasons but below the historical average, Thomson Reuters data showed.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.