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Stocks head lower after the Fed releases minutes from June meeting; energy stocks recover
NEW YORK (AP) ¯¯¯ Major stock indexes sank after the Federal Reserve said it was concerned about the strength of the U.S. economy.
In minutes from their June meeting released Wednesday, Fed officials made clear that they were concerned that the U.S. economy could struggle if Congress fails to avert tax hikes and across-the-board spending cuts scheduled for the end of the year. They also worried that Europe's debt crisis will curtail U.S. growth.
The Dow Jones industrial average fell 104 points to 12,548 as of 2:30 p.m. Eastern, putting it on track for its fifth straight day of losses. That would be the Dow's worst stretch since a six-day losing streak through May 18.
In other trading, the S&P 500 fell six points to 1,335. Technology stocks fell the most of the 10 industry sectors in the S&P 500 index. The technology-focused Nasdaq composite index lost 32 points to 2,870.
"The bottom line is that there aren't a lot of investors willing to put money into this market," said Jeff Kleintop, chief market strategist at LPL Financial. "There's not much to get excited about,"
The current batch of U.S. corporate earnings, which started to come in this week, isn't expected to be of much help to the stock market. Financial analysts forecast that companies in the S&P 500 will report a 2 percent earnings drop in the April-through-June period compared with the year before, according to the research firm S&P Capital IQ. That would be the first fall in profits since the summer quarter of 2009.
No major earnings announcements came out Wednesday morning. After the market closes, the hotel chain Marriott International will posts its quarterly results.
Chevron and other energy stocks rose, following oil prices higher. The price of crude oil jumped $2, to $86 a barrel, after the government that U.S. crude supplies fell for a second week straight, a sign that demand for energy may be increasing.
Energy stocks in the S&P 500 rose 1 percent. Chevron gained $1.72 to $105.59 and Exxon Mobil gained $1.11 to $84.22.
In Europe, Spain's borrowing costs fell after the country imposed new sales tax hikes and spending cuts in a bid to slash nearly $80 billion from its budget over the next two and a half years. Spain is being squeezed by high borrowing rates and 25 percent unemployment.
Europe's debt crisis has led banks and investment funds from around the world to shift their money into Treasurys. High demand for Treasurys has kept U.S. government borrowing rates low.
The Treasury auctioned 10-year notes at a record low interest rate Wednesday afternoon, 1.46 percent.
Among other stocks making bigger moves than the overall market:
¯¯¯ HHGregg plunged 37 percent. The appliance and electronics retailer said after the market closed Tuesday that weak sales will cause its quarterly loss to widen. The company also cut its full-year earnings outlook. Analysts at SunTrust and Stifel Nicolaus downgraded the company's shares. The company's stock lost $4.27 to $7.27.
¯¯¯ AMC Networks jumped 2 percent. A stock analyst at Susquehanna Financial Group said AMC, whose shows include "Mad Men," and "The Walking Dead," could reach a settlement with Dish Network in their dispute over fees by mid-October. Dish replaced AMC's channels on July 1, arguing that they were too expensive. AMC's stock gained 93 cents to $40.80. Dish fell 3 percent, or 95 cents, to $26.80.
¯¯¯ Mead Johnson Nutrition rose 3 percent after a Chinese agency apologized for what it said were false accusations that the company's baby formula contained a possibly dangerous ingredient. The accusations helped knock the company's stock down 3 percent on Tuesday. Mead Johnson jumped $2.69 to an even $78.