for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Bonds News

US STOCKS-Shares roiled by Fed minutes, higher gasoline

(Updates to late afternoon)

NEW YORK, April 11 (Reuters) - U.S. stocks tumbled on Wednesday as minutes from last month’s Federal Reserve meeting hinted at the need for more rate hikes, adding to worries about surging gasoline futures contract prices and signs of housing market troubles.

The Dow industrials were on track to end an eight-day streak of gains. Citigroup Inc. C.N helped pull down the Dow after the bank said it will eliminate 17,000 jobs, or 5 percent of its work force. The restructuring news had been expected for several weeks and helped push Citigroup's shares up 7.5 percent since mid-March. For details, see [ID:nN11415488]

The Federal Reserve, according to the minutes from its March 20-21 policy meeting, believed that weaker-than-expected economic indicators and “uncomfortably high” readings on inflation suggested greater risks of slower economic growth as well as greater uncertainty that core inflation would recede as expected. For more please double click [ID:nTRT000214] and [ID:nN11239424].

“What the minutes did is bring (investors) back to reality, to the fact that if things continue and there are inflationary pressures, the Fed isn’t going to allow that,” said Doug Roberts, founder and chief investment strategist at Channel Capital Research, in Shrewsbury, New Jersey.

The Dow Jones industrial average .DJI was down 92.81 points, or 0.74 percent, at 12,481.04. The Standard & Poor's 500 Index .SPX was down 9.58 points, or 0.66 percent, at 1,438.81. The Nasdaq Composite Index .IXIC was down 20 points, or 0.81 percent, at 2,457.61.

Related Coverage

Up until Tuesday, the Dow had its longest string of positive finishes in four years, although the increases in several sessions were modest.

U.S. government data showed a larger-than-expected drop in gasoline supplies last week, which pushed futures to an eight-month high.

Shares of Citigroup lost 1.3 percent to $51.71, while the S&P financial index .GSPF dropped 0.8 percent.

The stocks of other companies in the financial and housing-related sectors fell after the National Association of Realtors said tougher lending standards will slow the recovery in the U.S. housing market and data showed a fourth-straight weekly decline in U.S. mortgage applications.

The Dow Jones U.S. Home Construction index .DJUSHB was down 2.1 percent.

The housing slump will likely slow the U.S. economy, but will not trigger a recession, the International Monetary Fund said on Wednesday. The IMF lowered the forecast it made in September for 2007 GDP expansion to 2.2 percent from 2.9 percent. [ID:nN11219692] (Additional reporting by Ellis Mnyandu)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up