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U.S. Stocks Slide On Fed Minutes, Greece; Hot Stocks: JCP, ANF, LM, DE, SPLS, CHS

 May 16, 2012 04:39 PM

(By Balachander) U.S. stocks closed on a lower note for the fourth straight day, weighed by minutes from last month's Fed meeting and reports that the European Central Bank has stopped funding operations for some Greek banks.

S&P 500 Index shed 0.44 percent to finish at 1,324.80. The Dow Jones Industrial Average fell 0.26 percent to end at 12,598.55. The Nasdaq Composite Index dropped 0.68 percent to close at 2,874.04.

Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough, according to minutes of Federal Reserve's latest policy meeting released Wednesday.

The meeting suggested that economic activity was expanding moderately and the Fed promised to keep interest rates low at least through late 2014.

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The negative sentiment was also weighed by a report from Reuters that the European Central Bank has withdrawn funding to some Greek banks because they have not been adequately recapitalised. Greece is headed for a new round of elections after talks to form a coalition government failed. "As recapitalisation wasn't in place, the ECB stopped monetary policy operations," the Reuters report quoted one anonymous source as saying.

On the US economic front, housing starts in the U.S. rose in April from a five-year low, while building permits dropped for the first time this year. According to a Commerce Department report, housing starts rose 2.6 percent to 717,000 from a revised 699,000 in March, while economists' expected 680,000. Building permits, an indication of future construction, fell 7.0 percent to 715,000 from 769,000 in the prior month, while economists' predicted 730,000.

Hot Stocks Of The Day: JCP, ANF, LM, DE, SPLS, CHS

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J.C. Penney Co. Inc. (NYSE:JCP) plunged 19.72 percent after lower than anticipated quarterly results. The company said it will discontinue its $0.20 per share quarterly dividend.

Abercrombie & Fitch Co. (NYSE:ANF) slumped 13.00 percent after the company's quarterly revenue missed consensus. The company said European sales trends remained challenging in a very difficult macroeconomic environment.

Legg Mason Inc.

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