Dow's winning streak ends

NEW YORK (CNNMoney.com) -- Stocks slumped Wednesday after the minutes from the last Federal Reserve policy meeting seemed to support bets that the central bank is unlikely to cut interest rates anytime soon.

The Dow Jones industrial average (down 89.23 to 12,484.62, Charts) lost 0.7 percent, after having risen for the past eight sessions in a row, its best streak since 2003.

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The Nasdaq (Charts) composite lost 0.7 percent, and the broader S&P 500 (down 9.52 to 1,438.87, Charts) index lost almost 0.7 percent.

Treasury prices slipped, raising the corresponding yields. The dollar gained versus other major currencies.

Thursday morning brings reports on March import and export prices and weekly jobless claims.

But of greater interest to investors will be Friday's reports, which include the February trade balance, March Producer Price Index (PPI) and the preliminary April reading on consumer sentiment from the University of Michigan.

Stocks had been weak throughout the session as investors eyed initially higher oil prices and awaited the 2 p.m. ET release of the Fed minutes.

At that March meeting, the bankers held a key short-term interest rate steady at 5.25 percent for the sixth meeting in a row, as expected, and continued to say that the economy is moderating at a reasonable pace and that inflation is still too high.

However, the minutes were a bit more aggressive than the statement released at that time.

The minutes essentially reiterated what Fed officials have been saying in the weeks since the March 21 Fed meeting - namely, that the economy has weakened recently but should recover later in the year and that inflationary pressures are still in place and could necessitate further rate hikes this year.

Fed Chairman Ben Bernanke recently told Congress as much. However, the minutes seemed to underscore for stock investors that the Federal Reserve Board is unlikely to cut interest rates anytime soon.

"Bernanke kinda let the cat out of the bag when he testified a few weeks ago and the minutes corroborated that," said Stephen Stanley, chief economist at RBS Greenwich Capital.

Stanley said that, while the Fed's overall forecast hasn't changed, "the risks have grown in terms of both higher inflation and slower growth," putting the bankers in a bit of a bind in terms of interest rates.

"I think they are very much on hold for the time being," he said, noting that the Fed probably won't budge unless or until inflationary pressures accelerate more or the economic growth slows more rapidly.

Earlier in the afternoon, Chairman Bernanke discussed market discipline and hedge fund oversight in prepared remarks delivered to NYU Law School. Yet, as expected, his comments didn't address the economy or current monetary policy.

Separately, Richmond Fed President Jeffrey Lacker told the Charlotte Economics Club that policymakers need to be careful about taking inflation expectations for granted. Lacker is not a voting member of the Fed's policy committee this year.

Stocks had barely budged Tuesday ahead of the start of the quarterly earnings reporting period, which got under way after the close with Alcoa (up $0.18 to $35.08, Charts).

But that company's upbeat earnings failed to inspire investors Wednesday, amid spiking oil prices and worries about the economy.

After the close, Genentech (up $0.13 to $82.69, Charts) reported higher quarterly earnings and revenue that topped estimates. Shares rose 0.5 percent.

Other big names due to report results this week include General Electric (Charts) Friday morning, although the earnings reports don't really start pouring in until next week.

"Oil prices have been firming up the last few days," said Fred Dickson, chief market strategist at D.A. Davidson. "And we've had 8 up days in a row [for the Dow], so traders are maybe stepping back a bit before the earnings really get under way."

Also a factor: the International Monetary Fund cut its forecast for U.S. economic growth this year to 2.2 percent, the weakest in five years, reflecting the impact of the slowing housing market.

Additionally, the already troubled housing market is expected to see prices fall this year for the first time in nearly 40 years, the National Association of Realtors said Wednesday. (Full story).

In corporate news, Dow component Alcoa reported higher quarterly earnings and revenue that topped estimates, thanks to higher metal prices. Shares gained 1 percent Wednesday.

Alcoa was one of six Dow stocks rising. Of the 24 declining components, standouts included IBM (down $1.30 to $95.16, Charts), Walt Disney (down $0.40 to $34.59, Charts), General Motors (down $0.62 to $31.46, Charts), Verizon Communications (down $0.42 to $37.38, Charts) and Wal-Mart Stores (down $0.67 to $47.27, Charts).

Dow component Citigroup (down $0.60 to $51.80, Charts) announced that it will cut 17,000 jobs, or about 5.2 percent of its work force, as part of a broad restructuring geared to save the company billions over the next three years. Shares lost 1.2 percent.

Amgen (down $0.78 to $56.34, Charts) said it will delay reporting earnings by four days so as to include results of a clinical trial in which patients with lung cancer took its anemia drug. On Tuesday, the biotech said its chief financial officer was stepping down.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 2 to 1 on 1.57 billion shares. On the Nasdaq, decliners topped advancers by 3 to 2 as 1.99 billion shares changed hands.

U.S. light crude oil for May delivery rose 11 cents to settle at $62.00 a barrel on the New York Mercantile Exchange, giving back bigger gains accrued after the government reported a big drop in gasoline supplies.

COMEX gold for June delivery rose 20 cents to $681.70 an ounce.

Treasury prices fell, raising the yield on the 10-year note to 4.73 percent from 4.72 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen.

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