US stocks plunge after Fed minutes

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U.S. stocks plunged after volatile trading on Wednesday, with the Dow Jones Industrial Average dropping for the sixth straight session, as investors digested minutes of the U.S. Federal Reserve's latest monetary policy meeting.

The blue-chip Dow fell 105.44 points, or 0.70 percent, to 14, 897.55 points. The broader S&P 500 lost 9.55 points, or 0.58 percent, to 1,642.80 points. The tech-heavy Nasdaq Composite Index dipped 13.80 points, or 0.38 percent, to 3,599.79 points.

The Federal Open Market Committee (FOMC), the policy setting arm of the central bank, reaffirmed that a highly accommodative monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens, according to the minutes released Wednesday afternoon.

Moreover, some members of the committee expressed their belief that the pace of the massive asset purchases would be reduced in the near term.

The market fluctuated in response to the minutes, as investors analyzed implications of the minutes from different perspectives.

On the economic front, existing-home sales rose strongly in July, increasing 6.5 percent to a seasonally adjusted annual rate of 5.39 million from a downwardly revised 5.06 million in June, according to the National Association of Realtors. The data beat market expectations.

"The fear of rising rates brought a surge of existing home sales. The gain reversed the prior month's decline. The July report sets a strong start to the third quarter," Mei Li, an economic analyst at FTN Financial, said.

Meanwhile, U.S. mortgage applications dropped 4.6 percent from a week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending Aug. 16.

In corporate earnings, Hewlett-Packard shares slipped in after- hours trading as the personal computer maker met market expectations on earnings but missed analysts'forecasts on revenue for its third fiscal quarter shortly after the closing bell.

The CBOE Volatility Index, widely considered as a fear gauge of the market, surged 6.91 percent to end at 15.94.

In other markets, oil prices dropped on Wednesday. Light, sweet crude for October delivery lost 1.26 dollars to settle at 103.85 dollars a barrel on the New York Mercantile Exchange. Brent for October delivery went down 34 cents, to close at 109.81 dollars a barrel.

Gold future for December delivery on the COMEX division of the New York Mercantile Exchange lost 2.5 dollars to settle at 1,370.1 dollars per ounce on a strong dollar.

The U.S. dollar rose against major currencies as the minutes signaled a likely reduction of its massive asset purchase programs this year. In late New York trading, the euro dropped to 1.3376 dollars from 1.3419 dollars of the previous session.

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