U.S. stocks declined, giving the Dow Jones Industrial Average its longest retreat in 13 months, as minutes of the Federal Reserve’s July meeting showed officials support stimulus cuts to be made later this year if the economy improves.
The Standard & Poor’s 500 Index lost 0.6% to 1,642.80 at 4 p.m. in New York, the lowest since July 8. The Dow dropped 105.44 points, or 0.7%, to 14,897.55. The measure retreated for a sixth day, the longest losing streak since July 2012. About 5.6 billion shares changed hands on U.S. exchanges today, 11% below the three-month average.
“The Fed minutes continue to show this clear uncertainty as to when the monetary tightening will begin,” Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank in San Francisco, said in a phone interview for Bloomberg. His firm oversees $170 billion. “It will be a seminal moment when they move from the easing theyve been in for years toward some incremental tightening steps. The minutes are quite clear in the sense that the Fed doesnt know that we are there yet where the process can begin.”
The S&P 500 fluctuated after the Fed released its minutes at 2 p.m. in Washington yesterday. The benchmark index at one point erased losses of as much as 0.8%. Growing concern that the Fed would reduce stimulus this year contributed to the index’s 3.4% drop from a record close on Aug. 2 through yesterday. Fed monetary support helped propel the benchmark gauge up more than 150% from its bear-market low in 2009.
In corporate news, earnings didnt match expectations as Target declined 3.6% to $65.50, the lowest since March 1. The second-largest U.S. discount retailer joins Wal-Mart Stores Inc. and Macy’s Inc. in reporting results that showed the bumpy economy and increased Social Security taxes are making consumers reluctant to spend beyond necessities.
Goldman Sachs Group Inc. fell 1.5% to $157.11. A programming error caused the firm to send unintentional stock options orders in the first minutes of trading, pushing prices on dozens of contracts to a dollar each, according to a person briefed on the matter yesterday.
Lowe’s (LOW) added 4.3% to $45.97. The second-largest U.S. home-improvement retailer posted second-quarter profit that topped analysts’ estimates and raised its forecast for the year as the housing recovery fuels spending on remodeling.
All 10 S&P 500 main industries fell today. Utility and phone stocks dropped the most, sliding 1.2%.
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