While you were sleeping: UPDATED Stocks stall as June hike looks likely

The US dollar strengthened and Wall Street ended flat after minutes from the latest Federal Bank open market committee (FOMC) meeting tipped an interest rate increase next month.

"Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labour market conditions continued to strengthen, and inflation made progress toward the committee's 2% objective, then it would be appropriate for the committee to increase the target range for the federal funds rate in June," the minutes of the FOMC's April 26-27 meeting showed.

Fed policymakers next begin their two-day policy meeting on June 14, although a June hike is not a done deal yet.

"Participants expressed a range of views about the likelihood that incoming information would make it appropriate to adjust the stance of policy at the time of the next meeting,"  the minutes continued.

"Several participants were concerned the incoming information might not provide sufficiently clear signals to determine by mid-June whether an increase in the target range for the federal funds rate would be warranted."

Wall Street gave up earlier gains to finish largely unchanged. After rising as much as 106 points, the Dow Jones Industrial Average closed 3.36 points lower at 17,526.62. The Nasdaq Composite Index rose 0.5% to 4739.12 and the Standard & Poor's 500 Index moved up less than a point to 2047.63.

"They are ready to pull the trigger on a rate increase in June," Chicago-based BMO Private Bank chief investment officer Jack Ablin told Reuters.

Treasury yields rise
US Treasurys also fell, pushing yields on the two-year notes five basis points higher to 0.88%.

"You have a consensus view from the group that the June hike is in play," Sean Simko, who manages US$8 billion at SEI Investments in Oaks, Pennsylvania, told Bloomberg. "Unless there's an outlier in data, the market is taking the minutes as one step closer to a June hike."

In the Dow, declines in the shares of Wal-Mart and Nike, 3% and 2% weaker respectively, outweighed gains by JPMorgan Chase and Goldman Sachs, trading 3.4% and 2.4% higher respectively.

Shares of The Andersons soared after the US grain handler said it rejected two non-binding, highly conditional, unsolicited takeover proposals from HC2 Holdings, including the most recent $US1.04 billion offer, because they understate the company's value.

Andersons shares traded 28% higher at $US33.25 while HC2 shares traded 4.6% higher.

Shares of Hormel dropped 8.6% after lifting its full-year earnings outlook and posting record net earnings for the second quarter. Analysts are concerned about a drop in profit margins for its refrigerated foods, according to Bloomberg.

"Sequential decline in refrigerated margins should keep a lid on the stock," Jefferies Group analyst Akshay Jagdale, who has a hold rating on Hormel says, Bloomberg reported.

Europe's Stoxx 600 Index finished the day with a 0.9% gain from the previous close, led by fresh appetite for bank shares.

The UK's FTSE 100 index closed 0.03% lower. France's CAC 40 index and Germany's DAX index each ended the session 0.5% higher.

(BusinessDesk)