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 The market also faced technical resistance as the S&P 500 earlier
traded within a point of its record closing high set last month.
Minutes from the January meeting of the Federal Reserve's
policy-setting committee showed that several policymakers wanted to
hone in on the idea that their asset-purchase program would be
trimmed in predictable, $10-billion steps unless there is a big
economic surprise this year.
The statement doesn't deviate much from previous Fed communications,
but market participants have been expecting the Fed to point to
recent weakness in the economic data and reinforce their commitment
to stimulating the economy.
"I think the rally that we've seen off the 1,750 low (on the S&P
500) was largely driven by the sense the Fed is going to slow down
their retracement if it's necessary," said Uri Landesman, president
of Platinum Partners in New York.
"Anything that puts a crimp in that belief is going to scare this
market," he said. "This market is trading at nosebleed levels, and
so it will not have a huge tolerance even for news that can be
shaded in a bad direction."
Data on Wednesday showed U.S. housing starts recorded their biggest
drop in almost three years in January. The seasonally-adjusted U.S.
Producer Price Index for final demand rose 0.2 percent, giving no
real indication of a broad pickup in inflation pressures.
The data was among a slew of recent economic reports affected by a
severe U.S. winter, including a U.S. homebuilder confidence index on
Tuesday, which suffered its largest ever one-month drop in February.
The weather was also largely blamed for the sharp slowdown in hiring
in December.
Some economists, however, lowered their first-quarter growth
estimates on the back of the weak housing starts data. Goldman Sachs
cut its first-quarter growth estimate by a tenth of a percentage
point to a 1.8 percent annual rate. Barclays reduced its forecast by
0.3 percentage point to a 1.9 percent rate.
The Dow Jones industrial average <.DJI> fell 89.84 points or 0.56
percent, to end at 16,040.56. The S&P 500 <.SPX> slipped 12.01
points or 0.65 percent, to finish at 1,828.75. The Nasdaq Composite
<.IXIC> dropped 34.83 points or 0.82 percent, to close at 4,237.954.
The S&P 500 set an all-time closing high of 1,848.38 on January 15,
and came within a point of that level at its session high on
Wednesday.
Tesla <TSLA.O> shares fell nearly 5 percent during regular trading
hours, but jumped close to 12 percent after the bell. The electric
car maker posted better-than-expected fourth-quarter results and
said deliveries of its Model S electric sedan would surge more than
55 percent this year. The stock could hit a record high on Thursday.
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Facebook <FB.O> shares were down over 2 percent in extended trading
after closing at a record high, after news it will buy fast-growing
mobile-messaging startup WhatsApp for $16 billion in cash and stock,
plus an additional $3 billion worth of restricted stock units to
WhatsApp's founders. Facebook, the world's largest social network,
is looking for ways to boost its popularity, especially among a
younger crowd.
Safeway Inc <SWY.N> shares rose 3.2 percent in extended-hours
trading after the second-largest U.S. mainstream grocery store
operator said it is in talks about a possible sale of the company.
Chelsea Therapeutics International Ltd's <CHTP.O> shares soared 24.4
percent to $6.16 during regular trading a day after its drug
Northera, which treats a rare form of low blood pressure associated
with neurological disorders such as Parkinson's disease, won
approval from the U.S. Food and Drug Administration.
Kay Jewelers parent Signet Jewelers said it would buy smaller rival
Zale Corp for $21 per share in cash, valuing the mid-tier jeweler at
about $690 million. The offer represents a premium of about 41
percent to Zale's close of $14.91 on Tuesday.
Shares of Signet Jewelers <SIG.N> gained 18.1 percent to $93.65.
Zale <ZLC.N> jumped 40.3 percent to $20.92.
About 6.96 billion shares traded on U.S. exchanges, roughly in line
with the 7.06 billion average so far in February, according to data
from BATS Global Markets.
Declining issues outnumbered advancing ones on the New York Stock
Exchange by a ratio of 9 to 5. On the Nasdaq, about five stocks fell
for every two that rose.
(Additional reporting by Caroline
Valetkevitch; editing by Jan Paschal and Meredith Mazzilli)
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