U.S. stocks fell from five-year highs, giving the Standard & Poor’s 500 Index its biggest decline since November, as minutes from the Federal Reserve’s last meeting showed a debate over further stimulus action.
The Standard & Poor’s 500 Index slipped 1.2 percent to 1,511.95 at 4 p.m. in New York. The Dow Jones Industrial Average declined 108.13 points, or 0.8 percent, to 13,927.54. About 7.5 billion shares traded hands on U.S. exchanges today, or 22 percent above the three-month average. The VIX, the benchmark gauge of U.S. equity options, jumped the most in 15 months on growing demand for protection from losses.
“It doesn’t take a lot of imagination to think about where the next potential source of weakness or worry is going to be, and that’s going to be when the Fed steps back from their quantitative easing program,” Brian Barish, president of Denver, Colorado-based Cambiar Investors, which manages about $7 billion, said in a phone interview.
Minutes of the Federal Open Market Committee’s Jan. 29-30 meeting released today showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke’s program of buying bonds until there is “substantial” improvement in a U.S. labor market burdened with 7.9 percent unemployment.
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