* Retail stocks drop after results, Staples sinks
* Home resales hit more than three-year high
* Fed minutes offer few clues for scaling back stimulus
* Indexes off: Dow 0.55 pct, S&P 0.51 pct, Nasdaq 0.45 pct
By Chuck Mikolajczak
NEW YORK, Aug 21 U.S. stocks extended losses on
Wednesday to hit session lows after minutes from the U.S.
Federal Reserve's July policy-setting meeting offered few clues
on a time frame for a reduction in its bond-buying program.
Minutes from the meeting showed almost all of the 12 members
of the policy-making Federal Open Market Committee agreed a
change to the stimulus was not yet appropriate, and only a few
thought it would soon be time to "slow somewhat" the pace of the
"It seems the Fed is under immense pressure to begin
tapering, rather than doing it for macro reasons," said Todd
Schoenberger, managing partner at Landcolt Capital in New York.
"It doesn't seem like the economy is ready for tapering, and
this makes me a bit concerned."
Yields on the 10-year US Treasuries rose after
the announcement, touching 2.85 percent.
Market participants have been cautious recently, with the
S&P 500 dropping for five of the past six sessions amid
uncertainty over how soon the Fed will begin to wind down its
$85 billion a month stimulus program.
The central bank policymakers have said the policy, which
has fueled Wall Street's steep gains this year, could be slowed
from as early as September, assuming economic growth meets its
In the latest economic report, U.S. home resales rose in
July to their highest level in over three years, suggesting that
a surge in mortgage rates is having only a limited impact on the
housing market recovery.
The Dow Jones industrial average fell 82.79 points or
0.55 percent, to 14,920.2, the S&P 500 lost 8.5 points or
0.51 percent, to 1,643.85 and the Nasdaq Composite
dropped 16.264 points or 0.45 percent, to 3,597.326.
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, with earnings
reports from Lowe's, Target and others. The S&P retail index
fell 0.7 percent.
Staples reported weaker-than-expected quarterly
results on dismal sales in international markets and cut its
outlook for the year. Shares slumped 15.9 percent to $14.17 as
the S&P's biggest loser.
Target warned its annual profit may be near the low
end of its forecast as consumer spending remains cautious,
sending shares down 3 percent to $65.90.
Petsmart dropped 4.6 percent to $71.55 after its
results, while American Eagle Outfitters tumbled 10
percent to $14.75 after giving a weak outlook.
On the upside, home improvement chain Lowe's rose
4.1 percent to $45.89 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.
Shares of Toll Brothers rose 0.8 percent to $31.90
after the largest U.S. luxury homebuilder reported a jump in
revenue as the recovery in the housing market gathered pace.