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Overnight Markets: US stocks decline on Fed minutes

Overnight Markets: US stocks decline on Fed minutes

US stocks slipped on Thursday as Federal Reserve policy makers said they will probably end their $85 billion monthly bond-purchase programme sometime in 2013.

The Dow Jones industrial average fell 21 points, or 0.16%, to 13,391. The Standard & Poor's 500 Index shed three points, or 0.21%, to 1,459. The Nasdaq Composite Index lost 12 points, or 0.38%, to 3,101.

Equities gained earlier yesterday after economic data showed U.S. private-sector employers stepped up hiring in December, offering further evidence of underlying strength in the economy as 2012 ended. The Labour Department will tomorrow release its payrolls report for December.

Shares declined later after the minutes from the Fed's December policy meeting, released on Thursday, showed increasing reticence about further expanding the central bank's $2.9 trillion balance sheet.

Some policymakers thought asset buying should be slowed or stopped before the end of 2013 while others highlighted the need for further stimulus. However, the Fed look set to continue its open-ended stimulus programme for now.

Investors also turned their focus to looming battles in Congress, including the likelihood of bitter fights over budget cuts and raising the federal debt ceiling.

Retailers gained yesterday after several major companies in the sector beat expectations of modest sales increases in December.

Costco Wholesale Corp added 1% after the company reported a better-than-expected 9% rise in December sales at stores open at least a year.

Gap Inc surged 2.3% following news that the retailer will buy women's fashion boutique Intermix Inc, the Wall Street Journal reported.

On the negative side, Family Dollar Stores Inc plunged 13% on the company's report of lower-than-expected quarterly profit.

UnitedHealth Group Inc. sank 4.7% after the biggest U.S. health insurer was cut to hold from buy at Deutsche Bank AG.

In Asia, stocks outside Japan declined on Friday after the Fed minutes showed policy makers signalling they will probably end their $85 billion monthly bond-purchase programme sometime this year. Japanese equities surged as markets reopened today.

The MSCI Asia Pacific Excluding Japan Index declined 0.5% to 476 as of 10:04 a.m. in Hong Kong. Japan’s Nikkei 225 Stock Average gained 2.7% on its first trading day of 2013. Hong Kong’s Hang Seng Index lost 0.5%. China’s Shanghai Composite gained 0.8% on the first trading day of the new year.

Australia’s S&P/ASX 200 Index slipped 0.3% and New Zealand’s NZX 50 Index lost 0.1%. South Korea’s Kospi Index slid 0.5%.

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