U.S stocks end down on hawkish Fed minutes; Dow dips 0.52%

U.S. stocks fell on Wednesday with the release of the minutes from the Federal Reserve's latest policy meeting, which revealed monetary authorities favor scaling back stimulus measures as early as June. 

Stimulus measures, such as the Fed's monthly USD85 billion bond-buying program, flood the economy with liquidity to keep interest rates low and encourage investing and hiring, sending stocks rising as a side effect.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.52%, the S&P 500 index ended down 0.83%, while the Nasdaq Composite index dropped 1.11%.

Investors avoided equities and flocked to the safety of the dollar after the Fed released the minutes of its two-day monetary policy meeting that began April 30, which revealed an end to stimulus tools such as the asset-purchasing program may be nearing.

"A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome," the minutes read.

Earlier Wednesday, stocks rose after Fed Chairman Ben Bernanke appeared in Congress and said easing measures continue to benefit the economy.

Bernanke added withdrawing monetary stimulus could threaten the country's economic recovery as well as price stability.

"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," Bernanke said in prepared remarks of his testimony. 

"Such outcomes tend to be associated with extended periods of lower, not higher, interest rates, as well as poor returns on other assets. Moreover, renewed economic weakness would pose its own risks to financial stability."

Still, stocks headed south after Bernanke said the U.S. central bank may discuss scaling back stimulus measures "in the next few meetings" if the labor market makes noted improvements, which strengthened the U.S. dollar.

Elsewhere Wednesday, National Association of Realtors reported that U.S. existing home sales rose 0.6% to 4.97 million units in April from March’s revised total of 4.94 million. 

Analysts were expecting U.S. existing home sales to rise 1.4% to 4.99 million units in April.

Leading Dow Jones Industrial Average performers included Pfizer, up 1.84%, Home Depot, up 1.25%, and JPMorgan Chase, up 1.17%.

The Dow Jones Industrial Average's worst performers included Cisco, down 2.75%, DuPont, down 1.47%, and United Technologies, down 1.27%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.47%, France's CAC 40 rose 0.37%, while Germany's DAX 30 finished up 0.69%. Meanwhile, in the U.K. the FTSE 100 finished up 0.53%.

On Thursday, the U.S. is to release the weekly government report on initial jobless claims and official data on new home sales.