While you were sleeping: UPDATED Wall St edges higher as tech stocks offset oil drop

A decline in energy stocks weighed on Wall Street, while investors digested comments from US Federal Reserve officials about the potential for an interest rate increase next month.

Philadelphia Fed President Patrick Harker said he could support a hike at the Federal Open Market Committee's next two-day meeting in March.

"I think March is on the table. I would never take a meeting off the table," he said after a speech in San Diego.

Meanwhile, Minneapolis Fed President Neel Kashkari wrote an essay, posted on the bank's website, about his decision at last week's FOMC meeting to vote in favour of keeping interest rates unchanged.

"We are still coming up somewhat short on our inflation mandate, and we may not have yet reached maximum employment," Mr Kashkari said. "That suggests that somewhat accommodative monetary policy would still be appropriate to close those gaps."

Wall Street edged higher. At the close, the Dow Jones Industrial Average was up 37.87 points, or 0.2%, to 20,090.29. The Nasdaq Composite Index added 0.2% to 5674.22 and the Standard & Poor's 500 Index rose just half a point to 2293.08.

In the Dow, advances in IBM and Apple shares, up 1.5% and 1.0% respectively, outweighed declines in Chevron and Exxon Mobile shares, down 1.6% and 1.0%.

Energy stocks followed the price of oil lower, with crude futures falling 1.6% to $US50.17 a barrel.

Earnings remain positive
While concern about the impact of US President Donald Trump's controversial start in office is weighing on equity markets, the outlook for corporate profits and the economy remains positive.

"We've been getting some back and forth between the new administration's business-friendly policies versus the disruptions economically and politically from the immigration and trade-related issues," Jason Pride, director of investment strategy at Glenmede in Philadelphia, told Reuters.

"However, at the end of the day, the expansion is continuing, the economy and earnings are growing and that should support equities."

A Commerce Department report showed the US trade deficit narrowed 3.2% to a seasonally adjusted US$44.26 billion in December from the previous month.

Protectionist policies, as championed by Mr Trump, won't get rid of the deficit, some warned.

"When an economy is at full employment, an acceleration in demand tends to be accompanied by a pickup in import growth and a wider trade deficit," John Ryding, chief economist at RDQ Economics in New York, told Reuters.

"The US simply does not have enough spare labour and capacity at any exchange rate to close the deficit, which will likely widen in 2017 and 2018."

In Europe, the Stoxx 600 Index finished the session with a 0.3% advance from the previous close. The UK's FTSE 100 Index rose 0.2%, while Germany's DAX Index gained 0.3%.France's CAC 40 Index slid 0.5%.

(BusinessDesk)