Dow, Nasdaq sag on Fed minutes, but dollar flies

Wed Jul 11, 2012 5:43pm EDT
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By Herbert Lash

NEW YORK (Reuters) - The Dow and Nasdaq fell on Wednesday, while the dollar hit a two-year high against the euro after minutes from the Federal Reserve's June meeting showed any additional bond buying by the Fed was likely to happen only if the U.S. economy gets weaker.

The benchmark Standard & Poor's 500 Index closed flat, but the Dow slipped 0.4 percent and Nasdaq lost 0.5 percent for the day. The minutes from the Fed's June 19-20 meeting suggested that most policymakers were not yet ready to take bolder action on the sluggish economy.

The dollar extended gains against the euro, which hit a two-year low of $1.2211 after the minutes. Gold ended nearly flat, trimming its gains following the release of the Fed minutes.

Crude oil futures finished sharply higher, despite mixed signals from the Fed. A tight supply outlook in the North Sea and a drop in U.S. crude stockpiles in the latest week helped lift oil prices.

Investors were hoping the minutes would suggest the U.S. central bank was getting closer to another round of stimulus.

"The minutes do not on the surface suggest a sizable body of support for further immediate action, although it should be borne in mind that the comments were made prior to recent data disappointments," said Peter Buchanan, economist at CIBC World Markets in Toronto.

The Dow Jones industrial average .DJI slipped 48.59 points, or 0.38 percent, to close at 12,604.53. The Standard & Poor's 500 Index .SPX inched down just 0.02 of a point, or 0.00 percent, to 1,341.45. The Nasdaq Composite Index .IXIC declined 14.35 points, or 0.49 percent, to finish at 2,887.98.


Traders work at their desks at the Frankfurt stock exchange July 11, 2012. REUTERS/Alex Domanski