NEW YORK (The Street) -- Major U.S. stock markets stumbled Wednesday as minutes of the recent Federal Reserve meeting revealed vigorous debate before policymakers decided to cut stimulus, adding to speculation that the central bank will continue to reduce the bond-buying that has helped to underwrite equities for the past 18 months.
Private jobs data beat estimates ahead of monthly payroll figures this week, adding to forecasts the Fed Reserve may further cut its bond purchases.
The new earnings season, which begins on Thursday, may provide signals about the strength of the U.S. economic recovery, giving investors a reason to buy stocks despite trading at historically high levels.
The ADP private payroll employment showed companies added 238,000 jobs in December, beating expectations for a gain of 205,000 jobs.
Federal Reserve minutes showed that policymakers vigorously debated whether to begin cutting economic stimulus last month, with some members wanting to waiting while others favored a more drastic reduction. The central bank began to cut its bond purchases in December by $10 billion to $75 billion each month.
Investors turn their attention to earnings season Thursday, when former Dow-component Alcoa (AA) reports its quarterly earnings.
"Earnings will be up about 10%, and this economic backdrop of improving economic conditions in the U.S. will be conducive to that as well," Karyn Cavanaugh, market strategist at ING U.S. Investment Management, said in a phone interview.
- Forest Laboratories (FRX) popped 17.9% to $69.28, booking the top percentage gain on the S&P, after announcing it would buy Aptalis, a company which specializes in treatment for gastrointestinal problems and cystic fibrosis, for $2.9 billion in cash.
- Micron Technology (MU) was 9.9% higher at $23.87 after the largest domestic memory chip maker posted revenue that beat expectations after Tuesday's close
- Container Store (TCS) posted third-quarter revenue of $188.3 million late Tuesday, narrowly missing expectations. Its shares shed 14.8% to $39.02 on Wednesday.
- Bed Bath & Beyond (BBBY) is expected to announce third quarter earnings of $1.15 a share after Wednesday's closing bell. Shares increased 0.59% to $79.68 during the regular trading session.
The Hang Seng finished 1.25% higher while Japan's Nikkei jumped 1.94% on Wednesday. Germany's DAX closed down 0.09% while the FTSE finished off 0.50%.
-- Written by Jane Searle and Joe Deaux in New York