Investors nervously await the Fed

Investors nervously await the Fed
Wednesday, August 21, 2013 - 8:06am

It might be another bumpy day for markets.

U.S. stocks dropped in early trading Wednesday as investors wait for the release of minutes from the U.S. Federal Reserve's latest monetary policy meeting.

The Dow Jones industrial average, the S&P 500 and the Nasdaq slipped between 0.2% and 0.3%.

The minutes will be released at 2 p.m. ET and investors will be looking for clues as to when the central bank might begin cutting back on its massive bond-buying program.

David Jones, chief market strategist at IG in London, said the minutes -- and investor reaction -- should provide some hints about market direction in the weeks ahead.

But with markets now well into their traditional summer lull, Jones said it "would not be surprising to see this lack of conviction continue in the short term."

What's moving: Corporate earnings remained in focus as several retailers reported results.

Lowe's stock rose after the home improvement retailer announced that its quarterly sales and profit rose from a year earlier. Its strong results come a day after rival Home Depot also issued an upbeat outlook thanks to the continued recovery in the housing market.

Target shares fell even after the retailer announced significant year-over-year gains in sales. Investors seemed worried about a more tepid outlook for consumer spending.

Staples dropped more than 10% after the office supply retailer reported lower quarterly sales and profit compared to the prior year. The CEO blamed the declines on weakness in retail stores and said the company was working to ramp up its online sales.

Hewlett-Packard will report after the closing bell. The PC and printer giant is this year's best performer in the Dow as investors have embraced the turnaround strategy of CEO Meg Whitman.

Shares in Heineken were down sharply in Europe after the brewer reported earnings that were worse than expected.

World markets: European markets were lower in afternoon trading. London's benchmark FTSE 100 index was down by roughly 0.6%.

Asian markets ended with mixed results. Stocks in Hong Kong declined by 0.7%, while the Shanghai Composite index was flat. Japan's Nikkei was up slightly.

Stocks in India continued to slide. The Mumbai Sensex has fallen by roughly 7% over the past four trading sessions and the country's currency hit fresh lows versus the U.S. dollar this week. Policymakers have taken some steps to defend the rupee, but some analysts argue more must be done.

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