Dow falls for a second day, losing more than 100 points as the Fed discusses reducing stimulus this year

Dow falls for a second day, losing more than 100 points as the Fed discusses reducing stimulus this year

Major U.S. stock indexes slipped slightly on Wednesday as investors digested the Federal Reserve’s latest meeting minutes.

The Dow Jones Industrial Average shed roughly 150 points, or 0.4%, after it snapped a 5-day winning streak on Tuesday. The S&P 500 dipped 0.4% and the Nasdaq Composite traded 0.2% lower.

The Fed publishes its meeting minutes from its July gathering, revealing the central bank’s discussions about possibly dialing back its monthly bond buying program this year.

“Looking ahead, most participants noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year because they saw the Committee’s ‘substantial further progress’ criterion as satisfied with respect to the price-stability goal and as close to being satisfied with respect to the maximum employment goal,” the minutes said.

Since that July meeting, there’s been growing support within the Fed to announce a tapering in September and begin it in October. The 10-year Treasury yield inched slightly higher to around 1.28% on Wednesday after the release.

Elsewhere, housing starts fell 7% in July to a seasonally adjusted annual rate of 1.534 million units, well below economists’ expectations.

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Investors also waded through more earnings reports from major retailers Tuesday.

Shares of Lowe’s popped after the home improvement company’s earnings last quarter topped expectations, with higher sales to home professionals.

Target shares pulled back despite the retailer beating on second-quarter earnings. The company’s profit and revenue topped expectations and the company raised its forecast for the second half of the year, citing a good start to back-to-school spending.

Meanwhile, Pfizer shared gained after the U.S. announced it will begin distributing Covid-19 booster shots next month. New data show vaccine protection wanes over time, top U.S. health officials said.

The booster shot announcement comes as the highly contagious delta variant spreads, weighing on investor sentiment about the pace of economic reopening.

“The stock market is way overdue for a correction. Covid cases continue to spike higher darkening economic reopenings, consumer data shockingly has collapsed recently. …Several stocks have stopped reacting positively to good earnings, inflation reports remain hot, and Federal Reserve taper talk is everywhere,” Jim Paulsen, chief investment strategist at the Leuthold Group, said.

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