NEW YORK (AP) -- Stocks took a brief hit, then bounced back in late-afternoon trading Wednesday as traders worked through the minutes from the Federal Reserve's July meeting, which showed policymakers were mostly in agreement about ending the central bank's massive bond-buying program.
In the minutes, Fed board members said it "might soon be time" to slow the purchases. The bond-buying program has been in place in one form or another since late 2008 to keep interest rates low and encourage economic growth.
The Dow Jones industrial average was down as much as 122 points shortly after the minutes came out at 2 p.m. EDT, then clawed back to a tiny gain within an hour.
The Dow was up a point, or 0.01 percent, at 15,004 as of 2:55 p.m. The Standard & Poor's 500 index was up three points, or 0.2 percent, at 1,655. The Nasdaq composite edged up 14 points to 3,627.
Guy Berger, U.S. economist with RBS Securities, said the Fed minutes were mostly in line with what the market had expected.
"The minutes are very consistent with what Fed members have been saying since June," when Fed Chairman Ben Bernanke first laid out the idea of pulling back on bond purchases, Berger said.
Stocks have slumped since Aug. 2, when the Dow and S&P 500 closed at all-time highs. Traders have been worried about weak earnings and have been looking for clarity on how and when the Fed will wind down its bond purchases. The Dow has lost 4.6 percent since its record high.
The Fed has been purchasing $85 billion in bonds per month since December. Berger expects the Fed may reduce that to $65 billion in bonds per month after the central bank meets in September.
"August's employment report will be very important," he said.
Bond yields have risen dramatically the last few weeks as investors anticipate the end of the Fed's program. The yield on the benchmark 10-year Treasury note jumped sharply to 2.85 percent from 2.81 percent just before the news as investors sold bonds.
The 10-year note is used as a benchmark to determine interest rates on many types of loans, from individual mortgages to borrowing by large corporations.
Retail stocks were once again in focus, and not in a good way. Target, like many other retailers in the last two weeks, issued a muted sales outlook for the rest of the year. The stock dropped $2.05, or 3 percent, to $65.88.
Staples sank $2.57, or 15.3 percent, to $14.26 after the office supplies chain reported earnings and sales that missed expectations of financial analysts. The company also slashed its full-year profit forecast.
American Eagle Outfitters plunged $1.55, or 9.5 percent, to $14.83 after reporting that it had to slash prices because shoppers are reluctant to spend. American Eagle is the latest teen-apparel retailer to report disappointing earnings or cut their outlook, following Urban Outfitters and others.
One bright spot in retail was Home Depot competitor Lowe's, which was up 4 percent, making it the biggest gainer in the S&P 500. The home-improvement retail chain said it earned 88 cents per share in the period ending Aug. 2, ahead of financial analysts' expectations of 79 cents per share. The company also raised its full-year sales and profit forecasts, citing the improving outlook for the U.S. housing market.
In related news, the National Association of Realtors said Wednesday that sales of previously occupied homes jumped to an annual rate of 5.39 million in July from 5.06 million in June. Home sales are at highest level since November 2009.
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