* FOMC minutes show Fed discussed policy exit strategy in
* S&P 500 briefly hit session highs shortly after Fed
* Tiffany shares rally after results
(Updates with Fed minutes)
By Angela Moon
NEW YORK, May 21 U.S. stocks rose on Wednesday,
erasing the previous day's broad selloff, after minutes from the
Federal Reserve's last meeting showed central bankers have
discussed the eventual tightening of monetary policy but made no
decisions on which tools to use.
Minutes of the session released on Wednesday said Fed staff
presented several approaches to raising short-term interest
rates, but said the discussion was simply "prudent planning" and
not a sign rate hikes would come any time soon.
"The minutes are in line with what investors are thinking,
which is that we see a rebound in growth but it is not to a
point where the economy looks overly strong," said Robert
Pavlik, chief market strategist at Banyan Partners LLC in New
The day's gains put the S&P 500 on track for its third
advance in four days. The benchmark S&P index, however, is down
about 1 percent from its record intraday high on May 13.
New York Federal Reserve President William Dudley said on
Tuesday inflation should "drift upwards" towards the Fed's 2
percent goal, but a swift climb in inflation was unlikely.
Philadelphia Fed President Charles Plosser said the $2.5
trillion in reserves accumulated by banks could trigger more
Retail stocks were once again in the spotlight. Tiffany & Co
jumped 8.3 percent to $95.54 as the best performer on
the S&P 500 after the jewelry retailer raised its full-year
profit forecast. The S&P retail sector index
was up 0.9 percent.
Nine of the 10 major S&P sectors were positive, with only
utilities down slightly.
The Dow Jones industrial average rose 152.99 points
or 0.93 percent, to 16,527.3, the S&P 500 gained 13.73
points or 0.73 percent, to 1,886.56 and the Nasdaq Composite
added 31.39 points or 0.77 percent, to 4,128.28.
Lowe's Companies slipped 0.3 percent to $45.37. The
world's second-largest home improvement chain said sales picked
up in May and maintained its full-year sales growth forecast,
even as it reported weaker-than-expected quarterly results.
Target Corp reported a 16 percent drop in quarterly
profit but showed signs of progress in efforts to rebuild
customer confidence. Shares edged down 0.5 percent to $56.88.
With earnings season nearly completed, Thomson Reuters data
through Wednesday showed that of 478 companies in the S&P 500
that have reported earnings, 68.2 percent topped expectations,
above the 63 percent average since 1994 and a 66 percent beat
rate for the past four quarters.
(Reporting by Angela Moon; Editing by Nick Zieminski)