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S&P 500 closes higher as tech stocks snap 3-day losing streak

U.S. stocks closed mostly higher on Wednesday tech snapped a three-day losing streak.

The S&P 500 rose 0.2 percent, with information technology rising 1 percent to lead advancers, after turning lower earlier on Wednesday.

The Nasdaq composite rose 0.7 percent, with Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all closing higher.

Tech has been the best-performing sector this year, but it has fallen approximately 5 percent over the past month.

"Tech has been a strong performer for a very long time, so it's not that surprising to see some weakness every now and then," said Randy Frederick, vice president of trading and derivatives at Charles Schwab. "I think people are also warming up to the idea that interest rates may be going higher, so you've seen a move into financials."

The Dow Jones industrial average, however, closed around breakeven, with IBM contributing the most losses and Boeing the most gains. The 30-stock index remained around those levels after the Federal Reserve released the minutes from its June meeting.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

Fed officials indicated a determination to continue raising rates even with muted inflation levels, which they considered to be temporary and likely to rise over the long run to a targeted level of 2 percent, the minutes showed. They also showed that Fed officials believe the central bank's massive $4.5 trillion balance sheet can be reduced with "limited" disruption to financial markets.

"The big disappointment was the Fed gave no clue as to when the balance sheet unwind might start. There's still a chance it starts in September, but the odds likely shifted to later in the year now," said Ryan Detrick, senior market strategist at LPL Financial.

Treasury yields traded mixed on Wednesday, with the benchmark 10-year yield near 2.332 percent and the two-year note yield around 1.41 percent.

"Most of this is already in the market," said Robert Tipp, chief investment strategist at PGIM Fixed Income. "There was a lot of back-and-forth in the minutes, but in the end, it sounds like they want to start the run-off."

Craig Bishop, vice president of U.S. fixed income at RBC Wealth Management, said he believes the Fed will start unwinding the balance sheet between September and October "and hold off on raising rates until December." He added: "They really wan tto get this process going."

Wednesday will mark the first full trading day on Wall Street, as the New York Stock Exchange closed early on Monday and did not open Tuesday because of the Fourth of July holiday.

The Dow reached a record intraday high Monday as bank stocks gained, but the Nasdaq fell as tech stocks were under pressure.

In economic news, factory orders fell 0.8 percent in May, more than expected. Later this week, the U.S. government will release its monthly employment report.

Overseas, North Korea launched a missile on Tuesday, with Japan saying it appeared to have landed in the Japanese exclusive economic zone.

The news "did impact futures overnight, but it does seem like the market is desensitized to what's going on" in the region, said Daniel Deming, managing director at KKM Financial. "I am surprised ... because it did feel like this was a significant step forward in building an [intercontinental ballistic missile]."

Symbol
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DJIA
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S&P 500
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NASDAQ
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The Dow Jones industrial average fell 1.10 points, or 0.01 percent, to close at 21,478.17, with Intel leading advancers and Nike the biggest laggard.

The S&P 500 rose 3.53 points, or 0.15 percent, to end at 2,432.54, with information technology leading four sectors higher and energy lagging.

The Nasdaq composite advanced 40.80 points, or 0.67 percent, to close at 6,150.86.

About eight stocks advanced for every five decliners at the New York Stock Exchange, with an exchange volume of 886.10 million and a composite volume of 6.57 billion at the close.

—CNBC's Jeff Cox contributed to this report.