Stocks lower ahead of Fed; home sales improve

NEW YORK (AP) ? Stocks slid Wednesday on Wall Street, following Asian and European markets lower, as traders awaited clues about whether the Federal Reserve will take additional action to stimulate the American economy.

The National Association of Realtors said Americans bought more homes in July than in June and prices rose, evidence of a recovering housing market. The 2.3 percent increase in sales from June was the first gain in three months.

But the rate of home sales, at 4.47 million annually, was below the pace of April and May and well below the rate of roughly 5.5 million that economists consider healthy.

The Dow Jones industrial average was off 74 points at 13,130 at 1:15 p.m. EDT. The Standard & Poor's 500 index, which on Tuesday hit its highest point in four years, slid six points to 1,407.

The Nasdaq was down nine points to 3,058. Both the Dow and the Nasdaq had briefly risen earlier.

Investors will be looking for hints of the Federal Reserve's plans to fuel economic growth when it releases the minutes from its latest meeting at 2 p.m.

Given the lack of dramatic improvement or slowing in the economy, some investors are giving up hope that the Fed will add economic stimulus or signal that the economy is strong enough to be self-sustaining.

"The Fed will likely say what they have in the past because there's nothing that has moved the needle on the economy lately," said Stephen Carl, principal and head equity trader at investment bank The Williams Capital Group.

European markets declined as eurozone leaders met with their counterparts from Greece, which has asked for more time to meet its debt reduction targets. The delay could set up a confrontation with Germany, which has been growing impatient.

Germany's key stock index, the DAX fell 1 percent, and France's CAC 40 slipped 1.5 percent.

Earlier in the day, Asian markets closed down after Japan posted a trade deficit for July, reversing a year-ago surplus and adding to signs of a global economic slowdown.

Japan's Nikkei 225 index shed 0.3 percent, while South Korea's Kospi dropped 0.4 percent and mainland China's Shanghai Composite Index slid 0.5 percent.

Bond traders have become skittish about the Asian slowdown and the debt crisis in Europe. Investors returned to the haven of U.S. Treasurys, sending the yield on the benchmark 10-year down to 1.75 percent from 1.81 percent late Tuesday.

Riding an improving housing market, high-end home builder Toll Brothers reported 46 percent growth in its quarterly net income after delivering more homes at higher prices to its customers. Its stock rose 4 percent, or $1.24, to $33.05.

Toll Brothers caters to the luxury sector, which has withstood the economic downturn better than others. Its target market includes households that making more than $100,000 a year, with better credit and more job security.

The Commerce Department reported last week that applications for building permits rose to their highest level since August 2008, which signals that construction companies are growing more confident about the housing landscape.

Other home builder stocks also made big gains: PulteGroup gained 73 cents, or close to 6 percent, at $13.52 and Lennar rose 86 cents, or close to 5 percent, at $19.11.

Among other stocks making big moves Wednesday:

? Dell slumped 7 percent and traded near its 52-week low of $11.39. It was the worst-performing stock in the S&P 500. The computer maker said PC sales remained weak in its fiscal second quarter, and it forecast a disappointing third quarter and lowered its full-year profit forecast. Its stock slid 88 cents to $11.46.

? Williams-Sonoma jumped 12 percent after the kitchen and home store chain reported a 10 percent jump in profit. Its stock rose $4.45 to $42.68.

? Fifth Third Bancorp's stock shot to a 52-week high after the Fed allowed the bank to raise its dividend and buy back more of its own stock. The Cincinnati regional bank's stock was up 3 percent to $14.77, a jump of 38 cents. The stock had reached $15.02 in morning trading, a high for the past year.

? Discover Financial Services stock gained 5 percent, or $1.68, to $38.68 after announcing a partnership with PayPal. More than 7 million stores that take Discover cards will be able to process PayPal payments beginning next year.

Source: http://news.yahoo.com/stocks-lower-ahead-fed-home-sales-improve-142929551--business.html

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