2014.11.1922:43:58UTC+00US stocks drop on Fed minutes, deflation in focus

US stocks retreated from record highs after the Federal Reserve minutes displayed policymakers concern for the slowing prices in the economy.

The S&P 500 shed 0.15% or 3.08 points to 2,048.72 with energy leading the advancers and telecommunications being the biggest laggard among the gauge’s ten major industry groups. The Dow Jones Industrial Average inched down by 0.01% or 2.09 points to 17,685.73. Earlier, the gauge lost before rising 24 points following the release of Fed minutes before settling to its current level. Verizon Communications headed the blue-chip losses among 17 of the index’s 30 components. The Nasdaq Composite lost 0.57% or 26.73 points to 4,675.71. The trend showed that for every rising stock, around nine fell. The New York Stock Exchange witnessed 737 million shares change hands while composite volume reached 3.4 billion. The fear gauge of investors or the CBOE Volatility Index added 1% to 14.00.

Chief equity strategist at Rhino Trading Partners LLC, Michael Block, commented to Bloomberg that the Fed is admitting that they have no clue as to where inflation is going for the long term. Block adds that while he admires the candor of the Fed, it doesn’t make him want to own stocks at the moment.

Despite the stronger main labor-market indicators, inflation has apparently stagnated and policymakers has pointed last month that there will be a weaker economic outlook, increased downside risk for Japan, China, and Europe, and a stronger dollar.

Inflation is still having a hard time getting off despite the concern for economic recoveries from Japan, Europe, and the US prompting central banks worldwide to prolong stimulus measures as a justification. Fed Chair Janet Yellen appears to be contradicting herself in today’s comments as her previous statement implies that the risks had ebbed of price increases holding below the goals of policy makers.