Fed Minutes Show Members Near Providing Additional Stimulus

4:11 PM, Aug 22, 2012 -- Stocks pared their losses late after minutes from the most recent Federal Open Markets Committee meeting showed an active discussion of prospective stimulus measures, with members appearing close to pushing the button on a new round of bond purchases by the central bank. The mid-afternoon release lifted the markets off session lows that followed Japan reporting disappointing export data. Most industry sectors in the S&P 500 finished with small gains, reversing declines at the start of the day, although shares of consumer staple and industrial companies largely missed the late rally and closed in the red. Commodities were mixed.

The minutes of the July 31-Aug. 1 meeting of the central bank's Federal Open Market Committee showed a central bank worried about signs of decelerating growth -- and itching to take action. "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," the minutes said.

Most stocks spent the day in negative territory after Japan earlier today reported an 8.1% annualized decline in July exports, far steeper than the 2.9% drop analysts in Reuters poll were expecting. The biggest falloff was in sales into the European Union, down 25.1%, while sales to China - Japan's largest trading partner - declined 11.9% from year-ago levels. Taiwan and South Korea also posted export declines.

Closer to home, sales of existing homes climbed in July from an eight-month low, with sales of previously owned houses increasing 2.3% to a 4.47 million annual rate, figures from the National Association of Realtors showed today. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51 million rate.

Also, the Congressional Budget Office today said that the U.S. economy will hit a recession next year unless Congress acts to keep income and other tax rates from rising as well as preventing scheduled cuts in federal spending.

Here's where the markets stood at end-of-day:

Dow Jones Industrial Average down 30.82 (-0.23%) to 13,172.76

S&P 500 up 0.32 (+0.02%) to 1,413.49

Nasdaq Composite Index up 6.41 (+0.21%) to 3,073.67

GLOBAL SENTIMENT

Hang Seng Index down 1.06%

Shanghai China Composite Index down 0.50%

FTSE 100 Index down 1.42%

UPSIDE MOVERS

(+) WSM, Topped Q2 earnings and revenue estimates, reporting a $0.43 a share profit on a 7.3% increase in quarterly sales to $874.28 million. Analysts, on average, were expecting a $0.41 gain and $864.35 million in sales.

(+) AEO, Q2 earnings in-line with expectations. Revenues rise 10.5% to $739.68 million, beating estimates by nearly $20.4 million. Revised Q3, FY12 EPS guidance above Street

(+) FITB, Shares rise after last night disclosing plans to buy back 100 million shares of its stock and suggesting it may soon increase its dividend as well.

(+) SRZ, Soars to a new 52-week after agreeing to be acquired by Health Care REIT (HCN) for $14.50 a share in an all-cash transaction with a total value of about $845 million.

DOWNSIDE MOVERS

(-) DELL, Q2 earnings fell 18% from year-ago levels as personal computer sales slumped. The company also cut its FY13 outlook and now sees Q3 sales falling 2% to 5% from Q2 to between $13.8 billion to $14.2 billion. FY13 earnings were pared to "at least" $1.70 a share, down $0.43 from prior forecasts.

(-) WTSLA, Reports adjusted Q2 loss of $0.07 a share, missing Street calls by $0.02 and wider than the year ago loss of $0.03 per share. Net sales fell 10.2% to $135.3 million, also missing expectations by $8 million. Guides Q3 EPS, revenues above Street view.