NEW YORK — The Dow and S&P 500 ended barely lower Wednesday after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers are concerned about raising interest rates too soon.
Exxon Mobil (XOM), which fell 2.2 percent to $91.01, was the biggest drag on both the S&P 500 and Dow following an explosion and fire at an Exxon refinery near Los Angeles and a drop in crude oil prices. Also, Berkshire Hathaway (BRK-A) (BRK-B) disclosed shedding a $3.74 billion investment in Exxon.
The S&P 500 was down 1.5 percent, with U.S. crude oil falling 2.6 percent to settle at $52.14 a barrel.
The minutes reflect our view that while the economy is growing, an interest rate liftoff is not a slam dunk at this point.
Fed policymakers expressed concern last month that raising interest rates too soon could pour cold water on the U.S. economic recovery, according to minutes from the Fed’s Jan. 27-28 meeting.
“The minutes reflect our view that while the economy is growing, an interest rate liftoff is not a slam dunk at this point,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta.
“Clearly, there are some more dovish members that feel the economy is still not strong enough to support steady pricing, so that is holding the Fed back from normalizing policy.”
Stocks generally have risen with any sign the Fed could raise rates later rather than sooner.
An index of S&P 500 utilities, which tend to do well in a low interest-rate environment, jumped 2.4 percent and was the biggest positive in the S&P 500 as bond yields declined. S&P financial shares, which tend to benefit from a higher rate environment, declined 0.7 percent.
The Dow Jones industrial average (^DJI) fell 17.73 points, or 0.1 percent, to 18,029.85, the Standard & Poor’s 500 index (^GSPC) lost 0.66 points, or 0.03 percent, to 2,099.68 and the Nasdaq composite (^IXIC) added 7.10 points, or 0.14 percent, to 4,906.36.
The day’s move breaks a two-session string of record closing highs for the S&P 500.
Investors also weighed developments involving Greece. The European Central Bank agreed a modest increase in emergency funding for Greek banks, putting pressure on Athens to strike a financing deal with its European partners before its lenders run out of money.
Fossil Group (FOSL) shares sank 15.7 percent to $83.69 after the fashion accessory-maker reported quarterly earnings and revenue below expectations.
Also on the earnings front, Garmin (GRMN) fell 10.7 percent to $50.71 after the navigation device-maker gave an earnings outlook below estimates.
About 6 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the month so far, according to BATS Global Markets.
Advancing issues outnumbered declining ones on the NYSE by 1,662 to 1,403, for a 1.18-to-1 ratio on the upside; on the Nasdaq, 1,429 issues rose and 1,303 fell for a 1.10-to-1 ratio favoring advancers.
The S&P 500 posted 58 new 52-week highs and two new lows; the Nasdaq composite recorded 83 new highs and 26 new lows.
What to watch Thursday:
The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
At 10 a.m., the Federal Reserve Bank of Philadelphia releases its survey of manufacturing conditions in the Mid-Atlantic region; the Conference Board releases leading indicators for January; and Freddie Mac releases weekly mortgage rates.
These selected companies are scheduled to release quarterly financial results:
Bloomin Brands (BLMN)
Boise Cascade (BCC)
Cedar Fair (FUN)
Hormel Foods (HRL)
Mohawk Industries (MHK)
Newmont Mining (NEM)
Noodles & Co. (NDLS)
Six Flags Entertainment (SIX)
Walmart Stores (WMT)
To preserve the uniqueness of their island paradise, Hawaii since 2004 has had an "Exceptional Tree" tax allowance. Landowners can deduct up to $3,000 from their income for expenses such as pruning and fertilization for any tree designated as rare, big, old or a combination thereof. That’s per tree. Top-bracket earners taxed at the state’s highest rate (11 percent) would save $330 via the deduction. The work must be done by a certified arborist, and the deduction can be claimed only every third year. Hawaii has had a list of "Exceptional Trees" since 1975, and there are now estimated to be more than a thousand thus designated.
1. Hawaii: Exceptional trees
Maine legislators tax anyone who deals in their official state fruit-blueberries, at the rate of 1.5 cents per pound. The resulting revenues-more than $1.6 million to state coffers in the fiscal year that ended in June 2013-are used to promote the crop and agricultural research.
The state also taxes harvesters and processors of hard-shell clams (known in the state as mahogany quahogs) at $1.25 a bushel, but state revenues for that are much lower.
2. Maine: Blueberries and clams
Alabama is the last in the union to tax a deck of cards as if it were a "vice," like alcohol and tobacco. Taxing decks of cards, associated with gambling, was once fairly common, but most states have since set up separate control boards to regulate liquor and tobacco, and have let the cards slide.
But in Alabama, you’ll still pay a 10 cent sales tax on any pack of cards you purchase. Retailers also have to pay $2 to the state each year for the privilege of selling playing cards.
3. Alabama: Playing cards
Virginia levies a 50-cent excise tax on every lamb or sheep sold in the state. Both the Maine and Virginia taxes are examples of checkoff programs that collect taxes from an industry to fund promotional campaigns for the products. National commodity checkoff programs, authorized by the U.S. Department of Agriculture, have brought you campaigns such as "Beef: It’s What’s for Dinner" and "Got Milk?" But the Virginia program is extremely modest by comparison, having collected only $9,000 in fiscal year 2013. The funds go to the Virginia Sheep Industry Board, which spends them largely on predator control.
4. Virginia: Sheep
In 2013, in part to meet federal pollution-control mandates, Maryland legislators enacted fees on property owners in Baltimore and nine other Maryland counties, aimed at curbing storm water runoff. The fees were meant to fund programs to improve the water quality of the Chesapeake Bay, the largest marine estuary in the U.S. Sounds simple enough, but the way Maryland legislators wrote the law has led to an angry backlash in some corners against this so-called “rain tax.” One way localities calculate the tax is by measuring how much of a landowner’s tract is "impervious" to precipitation seeping into the ground. So the more you’ve developed it with buildings, driveways, tennis courts and the like, the less it will absorb and the more you pay. That’s how the tax is being implemented (through aerial and satellite photos) in Montgomery County, a heavily developed suburb of Washington, and many landowners are up in arms. New Maryland Gov. Larry Hogan, a Republican, campaigned against this tax in his winning 2014 campaign and has introduced legislation to repeal it, though it’s not clear that will fly with Democratic state legislators. Money still needs to be raised to satisfy the federal pollution mandates, but the methods may change.
5. Maryland: The rain?
Kansas is among a bevy of jurisdictions that allows sale of lower-alcohol beer (the term of art is “cereal malt beverage”) in convenience and grocery stores. But Kansas also taxes “3.2” beer differently — and there lies the rub. At a liquor store, all products, including, say, a conventional six-pack of Budweiser (with 5 percent alcohol by volume), are taxed at a special rate of 8 percent. At the convenience store down the street, however, ordinary sales tax is levied on the lower-alcohol, cereal malt beverage bottle of Bud. That often ends up being more than the 8 percent alcohol tax. In Pomona, Kansas, for example, the effective rate on the weaker beer would be 9.7 percent. Go figure.
6. Kansas: Weak beer
When it comes to taxation, the rule is generally the stronger the booze, the higher the tax (that’s why Kansas’s beer tax scheme is an anomaly). California follows that curve, but at 100 proof, you better be ready to pay through the nose. Distilled spirits are taxed at $3.30 a gallon if below 100 proof, or 50 percent alcohol. Go over that, like with Bacardi 151, and the tax doubles to $6.60. Maryland also notes the 100 proof point, but it only adds 1.5 cents per proof, per gallon to the relatively modest liquor tax of $1.50 per gallon, taking the Bacardi 151 to $2.27 per gallon.
7. California: Strong liquor
Entertainment venues pay a business tax to Nevada ranging from 5 percent to 10 percent on admissions fees (and food, drink and merchandise sales) whenever there’s live entertainment going on. There are exemptions, however, including this one, for businesses that provide "instrumental or vocal music, which may or may not be supplemented with commentary by the musicians, in a restaurant, lounge or similar area if such music does not routinely rise to the volume that interferes with casual conversation and if such music would not generally cause patrons to watch as well as listen." So your piano player can play “Feelings” softly and even crack a few jokes, tax-free, for your business. Just make sure they’re not funny enough to attract attention.
8. Nevada: Entertainment
Want to own a plush or fuel-thirsty ride? That’ll cost you extra in New Jersey. Cars that cost $45,000 or more or have a combined EPA fuel-mileage average of 19 or below pay an additional 0.4 percent on top of New Jersey’s 7 percent sales tax.
9. New Jersey: Costly cars with bad mileage
In New Mexico, making it to 100 years has a payoff beyond the chance that Willard Scott will wish you a happy birthday: You don’t have to pay state income tax anymore. If you’ve been physically present in the state for at least six months and a resident of the state on the last day of the year, and you’re not someone’s dependent, you’re eligible. You’ll still need to file, and there are some complications if you’re married and your spouse doesn’t qualify.
10. New Mexico: Centenarians
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