US stocks dive after Fed minutes

Feb 21 2013 07:58

New York - US stocks piled up losses on Wednesday after Federal Reserve minutes showed divisions over asset purchases, with some officials suggesting to wind them down before the jobs market picks up.

The Dow Jones Industrial Average finished down 108.13 points at 13 927.54.

The S&P 500-stock index fell 18.99 points to 1 511.95 and the tech-rich Nasdaq Composite dropped 49.18 points to 3 164.41, dragged down by heavyweight Apple, off 2.4%.

After opening mostly lower amid mixed housing and wholesale inflation data, the indexes hit fresh session lows after the Fed released the minutes of the January 29-30 Federal Open Market Committee meeting.

A "number" of participants said that an ongoing evaluation of the $85bn per month asset purchases "might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred", the minutes said.

Paul Edelstein of IHS Global Insight said in a research note that "if markets do not expect the Fed to stay the course, then expectations for economic growth and inflation will stay depressed and demand for safe assets (cash and government securities) will remain high."

Office Depot and OfficeMax meanwhile confirmed their merger after a premature announcement of the news.

The all-stock merger would create an $18bn office supplies retailer. Office Depot shares slumped 16.7% and OfficeMax shed 7.0%.

Hotel chain Marriott fell 2.7% after posting quarterly results that missed expectations.

Luxury home builder Toll Brothers also suffered from disappointing earnings, losing 9.1%.

Dell, which reported a 32% profit fall in 2012 that was nevertheless slightly better than expected, rose 0.2%.

Yahoo fell 1.7% after unveiling a new homepage.

Sony slid 1.2% ahead of its PlayStation 4 news conference

The bond market was mixed. The yield on the 10-year Treasury bond fell to 2.02% from 2.03% late on Tuesday, while the 30-year edged up to 3.21% from 3.20%. Bond prices and yields move inversely.

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wall street  |  markets



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