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The blue chips fell for the fifth-straight day in choppy action on Wednesday after minutes from the Fed offered a gloomy economic outlook and highlighted a sharp divide on whether central bank officials are ready to commit to further policy action.
The Dow Jones Industrial Average fell 48.6 points, or 0.38%, to 12605, the S&P 500 slid 0.02 point, or 0.00%, to 1341 and the Nasdaq Composite dropped 14.4 points, or 0.49%, to 2888.
The Dow is now on its longest losing streak since May 18, according to data compiled by FOX Business. The S&P closed the day essentially unchanged, helped my a strong rally among energy shares. On the other end of the spectrum, technology and industrial stcocks posted the weakest performance.
Minutes from the Federal Open Market Committee’s June meeting revealed Fed officials expect the U.S. economy to continue expanding more slowly than expected, with the unemployment rate falling “only slowly.” The policy-setting board continued discussing the prospect of further monetary stimulus, but divisions remained, partially stemming from a disagreement on the underlying causes of the weak employment growth. Still, economists said that division may be narrowing. Indeed, Paul Edelstein, director of financial economics at IHS Global Insight, said in a research note that the comment on the likeliness of more easing is "much stronger than in the minutes for the April meeting."
The Fed has been faced with a considerable amount of data suggesting the rate of expansion in the U.S. economy has slowed down dramatically, coupled with three-straight months of tepid job growth.
Data released on the day were mostly in line with estimates.
The U.S. trade deficit fell to $48.68 billion in May from an upwardly revised $50.6 billion in April. Economists were expecting the deficit to narrow to $48.5 billion from an initially reported $50.06 billion. The data figure directly into broader measures of economic growth; the larger the deficit, the more it drags growth down. It also provides a picture of how strong domestic and international demand is holding up.
A separate report from the Commerce Department showed wholesale inventories rising 0.3% in May from April. Higher inventories generally imply companies are purchasing goods and adding to their stocks in anticipation of higher demand. However, wholesale sales dipped 0.8% on a month-to-month basis in the biggest decline since March 2009. The biggest decline was in petroleum sales, which tumbled 4.7%.
It has been a volatile week for oil futures, with traders paying close attention to the narrowly averted oil-worker strike in Norway. The benchmark contract traded in New York jumped $1.90, or 2.3%, to $85.81 a barrel. Wholesale New York Harbor gasoline rose 0.8%, to $2.769 a gallon.
In metals, gold dipped $4.10, or 0.26%, to $1,576 a troy ounce.
In corporate news, Peregrine Financial Group filed for Chapter 7 bankruptcy after regulators accused the brokerage of misappropriating millions of dollars in customer funds. People involved in the futures industry said the move may erode confidence as it occurred just months after the collapse of MF Global.
"It’s not as big as MFGlobal but a repeat is not good for confidence in futures brokers and for the futures industry," Olivier Jakob, managing director at Petromatrix, based in Switzerland wrote in an e-mail.
The Euro Stoxx 50 rose 0.2% to 2246, the English FTSE 100 fell 0.01% to 5664 and the German DAX climbed 0.24% to 6454.
In Asia, the Japanese Nikkei 225 slipped 0.08% to 8851 and the Chinese Hang Seng edged higher by 0.12% to 19420.