Stocks lower but cut losses after Fed minutes

August 19 23:42 2015

The stock market wiped out most of its steep early losses Wednesday after minutes from the Federal Reserve’s last interest rate meeting showed the central bank was “approaching” its first rate hike in nearly a decade. Investors received confirmation that Fed policymakers were close to raising interest rates for the first time in nearly a decade with the release of the minutes from its July 28-29 policy meeting. But the minutes also show some policymakers still need to see further improvement in the economy and jobs market.the-percentage-of-americans-playing-the-stock-market-is-at-an-all-time-low

Many economists think rates could increase as early as September, but some say recent market volatility overseas could push the hikes back. At 2:35 p.m. ET, the Dow Jones industrial average was down 70 points, or 0.4%. The Standard & Poor’s 500 index dropped 0.4% and the Nasdaq composite index fell 0.3%. Earlier, the Dow had been off 200 points under the weight of oil hitting a new 6 1/2-year low, Chinese stocks having another volatile session and angst rising about what minutes from the Fed’s July meeting would reveal. The concern about the Fed proved unfounded.

The losses had been broad-based with all 10 sectors of the S&P 500 at one point being down for the day. The energy sector remained the hardest hit as oil prices tumbled about 4% after a government report showed that U.S. crude stockpiles increased. U.S. benchmark crude was trading down $1.78 to $40.84.

Markets were also on edge as stocks in China were volatile for a second straight session with the Shanghai composite index slumping as much as 5% before recovering to finish up 1.2%. That comes a day after a 6.2% plunge — China’s biggest decline in 3 weeks — helped drag global markets lower. Last week, China’s dramatic devaluation of the country’s yuan currency led to global stock market turmoil and analysts say investors are fearing the yuan may be devalued further.