Stocks Deepen Losses on Fed's Remarks About Stimulus

NEW YORK ( TheStreet) -- Major U.S. equity indices posted deeper losses Wednesday after the Federal Reserve's minutes from its January meeting suggested many officials are open to changing its stimulus program. Fresh data for housing starts and the producer price index already had sent stocks down.

The Dow Jones Industrial Average wrapped up the trading day down 108 points, or 0.8%, to 13,928.

Breadth within the Dow was negative, with losers outpacing winners 24 to six. Bank of America ( BAC), UnitedHealth Group ( UNH) and Alcoa ( AA) were firmly lower on the blue-chip index.

Bank of America CEO Brian Moynihan's 2012 pay totaled some $12 million, including $11.1 million in restricted shares. The bank chief earned $7 million in 2011. Shares slid 3.3%.

Boeing ( BA), Wal-Mart ( WMT), Merck ( MRK) and Verizon ( VZ) were among the biggest gainers.

Boeing engineers accepted a new four-year contract, but technical workers voted to authorize a future strike as they rejected the contract offer. The news comes amid Boeing's troubles with the battery on its Dreamliner jets. The company has discovered a fix to the problem, Reuters reported. Shares added 0.2% on Wednesday.

Trade volume was heavy on the New York Stock Exchange at 4.19 billion shares, while it totaled 1.99 billion shares on the Nasdaq. Decliners were ahead of advancing issues by a 3.3-to-1 ratio on the NYSE and by a 3.6-to-1 ratio on the tech-heavy index.

The S&P 500 declined 19 points, or 1.2%, to 1,512. Nasdaq was off 49 points, or 1.5%, to 3,164.

"What you're getting today is just a digestion of mixed data, the fact that the S&P 500 moved 7% so far year-to-date you're getting a little bit of exhaustion as the market awaits more data points," said Drew Nordlicht, managing director at HighTower San Diego.

The Commerce Department said Wednesday that U.S. housing starts printed at 890,000 for January, an 8.5% decrease from an upwardly revised 973,000 reported in December. A consensus among analysts was looking for an increase of 914,000.

The Bureau of Labor Statistics reported the January producer price index increased 0.2% month over month. It was better than the December decrease of 0.2%. Consensus among analysts had forecast PPI to rise by 0.3% month over month. Minus food and energy, the index increased 0.2% in January.

The Federal Open Market Committee -- the policy-making wing of the Fed -- met in January, and the minutes released Wednesday said many members were more open to backing away from the current $85 billion in monthly open-ended purchases of longer-term Treasuries and mortgage-backed securities.

In early January, the FOMC announced surprise dissension among its members as a few said the central bank's highly accommodative policy should end well before the end of 2013, while others argued its longer-term Treasuries and mortgage-backed securities purchasing programs should conclude by the end of 2013. Still, some said the Fed should continue its highly accommodative policy for the near future.

Gold futures for April delivery plummeted $26.20 to settle at $1,578 an ounce at the Comex division of the New York Mercantile Exchange, while futures for April crude oil contracts plunged $1.88 to $95.22 a barrel.

The benchmark 10-year Treasury added 6/32 to dilute the yield to 2.011%. The dollar was popping 0.67%, according to the U.S. dollar index.

In corporate news, Office Depot ( ODP) said it would acquire competitor OfficeMax ( OMX) in a stock transaction that valued OfficeMax at $13.50 a share. A joint-company statement said Office Depot would offer to OfficeMax stockholders 2.69 of its common shares for every 1 share of OfficeMax. Office Depot shares sank 16%, while OfficeMax shares dropped 7%.

Dell ( DELL) announced fourth-quarter earnings of 40 cents a share on $14.3 billion in revenue, which was off 11% year-over-year, but up 4% from the fiscal third quarter. Analysts expected 39 cents a share on $14.1 billion. Shares closed up 0.2%.

Dell didn't provide an outlook for the first quarter as it cited the company's recent move to go private.

Tesla Motors ( TSLA) reported a fourth-quarter adjusted loss of 65 cents a share on $306 million in revenue. Consensus among analysts expected a fourth-quarter loss of 53 cents a share on $298.9 million in revenue. Shares of the electric-car maker was down 3% in after-hours trading.

Toll Brothers ( TOL) reported a profit of 3 cents a share on revenue of $424.6 million. The report came in worse than expected as analysts were forecasting a profit of 11 cents a share on $500.6 million in revenue. The company said its backlog at Jan. 31 was $1.86 billion, which was up 66% from a year earlier. Shares were down 9.1% on Wednesday.

Electronics giant Sony ( SNE) was expected to unveil its latest gaming console, the PlayStation 4. The company is holding the event in New York. American depositary receipts shed 1.2%.

Dish Network ( DISH) reported earnings of 46 cents a share on revenue of $3.59 billion. Revenue dropped from a year earlier, while earnings fell from 70 cents a year earlier. Analysts were looking for 51 cents a share on revenue of $3.56 billion. Shares shed 0.2%.

Herbalife ( HLF) reported earnings and revenue rose in the fourth quarter. The stock has received much attention as investors Carl Icahn and Bill Ackman have publicly disagreed over the worth of the company. Shares lost 4.9%.

-- Written by Joe Deaux in New York.

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