NEW YORK — The stock market mostly recovered from an afternoon slump to end with slight losses.
In minutes from their latest meeting released Wednesday afternoon, Federal Reserve officials said they saw a variety of threats to the U.S. economy, including a slowdown in China and a looming budget crunch in Washington. The Fed also didn't signal that new steps to stimulate the economy were on the way.
Investors took the news badly at first, but by the end of the day were taking it in stride. The Dow Jones industrial average dropped as many as 118 points shortly after the 2 p.m. release of the Fed's minutes. Thanks to a recovery in the last hour, it was down just 48 points at the closing bell, not much different from where it was earlier.
Fed officials said the economy could struggle if Congress fails to avert tax hikes and across-the-board spending cuts scheduled for the end of the year. They also worried that Europe's debt crisis and China's slower growth would weigh on the U.S.
But it was what the Fed didn't say that really tripped the stock market up, said Steven Ricchiuto, chief economist at Mizuho Securities USA. He said many traders had hoped to see evidence that the Fed was prepared to pull the trigger on a new bond-buying effort to prod the economy forward.
"They didn't get what they wanted to see," Ricchiuto said.
The Dow closed at 12,604.53, down 48.59 points. The Standard & Poor's 500 index slipped 0.02 of a point to 1,341.45. The technology-focused Nasdaq composite index lost 14.35 points to 2,887.98.
It was the fifth straight day of losses for both the Dow and S&P. That's the worst stretch for both since a six-day losing streak that ran through May 18.