U.S. stocks dipped Wednesday morning ahead of minutes released from the Federal Reserve’s latest policy meeting, as investors weighed uncertainty over debt negotiations in Greece. The Greek government said it will request a loan extension for up to six months from its creditors Thursday.
Despite the uncertainty surrounding Greece, U.S. stocks still traded near all-time highs after the S&P 500 Index closed at a record high of 2,100.34 Tuesday. The S&P 500 also hit an all-time intraday high of 2,101.30 during the previous session.
In early trading, the Dow Jones Industrial Average, which measures the share prices of 30 large industrial companies, fell 31.53 points, or 0.17 percent, to 18,016.05, and the S&P 500 stock index lost 3.79 points, or 0.19 percent, to 2,096.42. The Nasdaq Composite fell just 1.40 points, or 0.03 percent, to 4,897.87.
Greece To Request Loan Extension Thursday
The Greek government said it will request a loan extension for up to six months from its creditors on Thursday morning. However, Germany, the largest economy in Europe, said there would not be a deal unless Greece sticks to the terms of its current $270 billion bailout program. Global fears escalated earlier this week after Greece and eurozone finance ministers failed to reach an agreement regarding the country’s debt program Monday. Failure to reach an agreement would risk national bankruptcy as Greece's bailout package expires at the end of the month.
Home Construction Drops In January
Data Wednesday revealed that U.S. homebuilders slowed the pace of construction in January. Housing starts, which is considered to be a critical indicator of U.S. economic strength in the housing sector, declined 2.0 percent, to a seasonally adjusted annual pace of 1.07 million units, the Commerce Department said Wednesday. Meanwhile, building permits for future home construction in January fell 0.7 percent, to a 1.05 million-unit pace.
Producer Prices Post Largest Decline Since November 2009
Separate data Wednesday showed U.S. producer prices posted record drop in January, a sign that a drop in energy prices is weighing on inflation. The producer price index, which measures prices paid to firms for their goods and services, fell 0.8 percent in January after falling 0.2 percent in December, the Labor Department said Wednesday. It was the biggest decline since November 2009. The drop gives some Federal Reserve officials room to pause as the central bank debates whether to hike interest rates this year.
FOMC Minutes On Tap
The Federal Reserve is scheduled to release its latest minutes from the Federal Open Market Committee’s meeting last month. Investors will be eyeing the report to see whether the FOMC hinted at when the central bank will begin raising interest rates, which are currently at historic lows. Most economists expect to see a hike in rates in mid-2015.
"Given that the Fed is targeting the inflation rate in one or two years' time rather than the current rate, this is not a reason to delay the first interest rate hike, which we expect in June," Paul Ashworth, chief economist at Capital Economics, said in a research note Wednesday.