NEW YORK — U.S. stocks fell on Wednesday with the S&P 500 posting its biggest decline in three weeks, after minutes from the latest U.S. Federal Reserve meeting showed some officials were open to tapering large-scale asset purchases as early as the June meeting.
Trading was volatile — the Dow and the S&P indexes both rose more than 1 percent during the morning, but fell more than 1 percent in the afternoon.
The minutes followed comments from Chairman Ben Bernanke, who said the Fed could decide to scale back the pace of bond purchases at one of the “next few meetings” if the economic recovery looked set to maintain forward momentum.
The comments were a blow to a market that had accelerated after Bernanke said the central bank needed to see further signs of traction in the economy before it tapered stimulus.
“This is a very sensitive market and particularly sensitive to any notion that tapering will come too soon,” said Quincy Krosby, market strategist at Prudential Financial in New York.
“No one wants to be selling if the data reaches the point when the Fed begins to specifically talk about tapering. The market doesn’t wait for the Fed to move. It will move before. That’s how it operates.”
Krosby also added that Bernanke went off-script and in his effort to be transparent, “he confused the market.”
Investors have increasingly turned their attention to when the Fed’s current $85 billion-per-month bond purchase program might end or slow. The stimulus has been a major force behind a rally in U.S. equities that has helped the S&P 500 and Dow industrials gain about 16-17 percent so far this year.
The Dow Jones industrial average was down 80.41 points, or 0.52 percent, at 15,307.17. The Standard & Poor’s 500 Index was down 13.81 points, or 0.83 percent, at 1,655.35. The Nasdaq Composite Index was down 38.82 points, or 1.11 percent, at 3,463.30.
The S&P 500 rose as high as 1,687.18 and fell as low as 1,648.86 during Wednesday’s trading session while the Dow rose as high as 15,542.40 and fell as low as 15,265.96.
All 10 sectors on the S&P 500 closed negative, with energy and utilities leading the decline. The energy sector index fell 1.2 percent while the utilities sector fell 1.6 percent.
After the market close, shares of Hewlett-Packard Co. jumped 10 percent after the world’s largest personal computer maker raised the lower end of its full-year outlook. The stock had closed up 0.6 percent at $21.23.