US STOCKS-Wall Street slips before Fed releases minutes

Wed Aug 21, 2013 10:48am EDT

* Staples tumbles, Lowe's rises after results

* Home resales hit more than three-year high

* Fed minutes due at 2:00 p.m. EDT

* Indexes off: Dow 0.4 pct, S&P 0.3 pct, Nasdaq 0.1 pct

By Rodrigo Campos

NEW YORK, Aug 21 (Reuters) - U.S. stocks dipped on Wednesday as investor caution prevailed before the Federal Reserve publishes the minutes of its July policy-setting meeting later on Wednesday.

Investors have been grappling over the past several weeks with uncertainty about when the Fed will begin to wind down its $85 billion a month stimulus program. The minutes from the meeting may provide clues to the timing and scope of the Fed's tapering.

The minutes will be released at 2 p.m. (1800 GMT).

"I believe tapering is going to begin in September because it has to. The market needs to adjust to the beginning of getting back to normal on rates," said Doug Cote, chief market strategist at ING U.S. Investment Management in New York.

The Dow Jones industrial average fell 57.32 points or 0.38 percent, to 14,945.67, the S&P 500 lost 5.32 points or 0.32 percent, to 1,647.03 and the Nasdaq Composite dropped 2.977 points or 0.08 percent, to 3,610.613.

The S&P 500 rose on Tuesday to halt a four-day losing streak but remained under technical pressure as it closed below its 50-day moving average for a third straight session. The level, near 1,658, is becoming technical resistance.

Retailers were in focus for a second day on Wednesday with earnings from Lowe's, Target and others.

Target warned its annual profit may be near the low end of its forecast as consumer spending remains cautious, sending it shares 1.9 percent lower to $66.65.

Staples reported weaker-than-expected quarterly results on dismal sales in international markets and cut its outlook for the year. Shares slumped 12.5 percent to $14.73. .

Shares of home improvement chain Lowe's rose 5.4 percent to $46.48 after it reported a bigger-than-expected rise in profit and sales as the housing market's recovery encouraged people to spend more on their homes.

U.S. home resales rose in July to their highest level in over three years, suggesting a sharp increase in mortgage rates is having only a limited impact on the housing market recovery.

Shares of Toll Brothers rose 1.3 percent to $32.50 after the largest U.S. luxury homebuilder reported a jump in revenue as the recovery in the housing market gathered pace.

Market makers and traders waited to hear details on a flood of erroneous trades that hit U.S. equity options markets on Tuesday when Goldman Sachs sent orders accidentally because of a technical error.

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