By Harry Robertson and Pete Schroeder
LONDON/WASHINGTON (Reuters) -Wall Street turned lower on Wednesday as Federal Reserve meeting minutes showed central bank officials divided over further rate hikes, while oil continued its downward trend on concern over China’s economy.
U.S. stocks reversed earlier gains to stand solidly lower in afternoon trading. The Dow Jones Industrial Average was down 0.18%, the S&P 500 was 0.35% lower and the Nasdaq Composite dipped 0.71%. The U.S. decline came on the heels of lower stock prices in Europe and Asia. The MSCI world equity index, which tracks shares in 45 nations, was last down 0.62%.
Minutes of the Fed’s July rate-setting meeting showed officials were divided on the need for more interest rate hikes, although “most” policymakers saw fighting inflation as still their top priority.
A “couple” of participants advocated at the July meeting against another interest rate hike, citing risks to the economy from pushing rates too high. But the overall message from the Fed was participants “remained resolute” in a commitment to reducing inflation, and uncertainty remained high.
Earlier in the day, fresh economic data continued to point to persistent strength in the U.S. economy, with single-family homebuilding jumping in July and industrial output growing more than expected.
The yield on the 10-year U.S. Treasury note ticked up to 4.25% in the afternoon, nearing a more than nine-month high of 4.274% touched in the previous session.
Ongoing concerns about the health of China’s economy also weighed on various market sectors, with oil falling more than 1% after posting similar losses earlier in the week.
Brent crude was last down 1.38% at $83.72 a barrel. U.S. crude dropped 1.63% to $79.67 per barrel.
“Much of the decline is explained by continuing concerns surrounding the economic slowdown in China, as well as rising tensions with the U.S.,” said Thomas Gehlen, senior market strategist at Kleinwort Hambros.
China’s new home prices fell for the first time this year in July, data showed on Wednesday.
The Chinese central bank lowered its policy rate on Tuesday, after a long run of weak figures, but investors have so far been unimpressed by the response.
News that a leading Chinese trust firm has missed repayments on dozens of investment products since late last month added to fears the country’s property crisis would have a wider impact.
The dollar rebounded from earlier losses and was poised for five straight days of gains, with the dollar index, which tracks the greenback against other major currencies, up 0.16% to 103.378.
(Reporting by Harry Robertson in London and Pete Schroeder in Washington, additional reporting by Kane Wu in Hong Kong; Editing by Mark Potter, Kirsten Donovan)
