* Fed to continue asset buys as doubts grow
* Investors eye congressional-White House battles ahead
* Retailers post December sales
* Positive jobs data has little impact
* Indexes down: Dow 0.16 pct, S&P 0.21 pct, Nasdaq 0.38 pct
By Chuck Mikolajczak
NEW YORK, Jan 3 (Reuters) - U.S. stocks dipped on Thursday
after signs the Federal Reserve has growing concern about its
highly stimulative monetary policy, giving investors reason to
pull back after a two-day rally.
The minutes from the Fed's December policy meeting, released
on Thursday, showed increasing reticence about adding to the
central bank's $2.9 trillion balance sheet, which it expanded
sharply in response to the financial crisis and recession of
Some policymakers thought asset buying should be slowed or
stopped before the end of 2013 while others highlighted the need
for further stimulus. The Fed's policy of easy credit has helped
push the S&P 500 to a 13.4 percent gain in 2012. Ending that
policy would remove an incentive for investors to purchase
riskier assets like stocks.
"The surprise was the changes to duration and extent of that
program in 2013, but given the tone in previous Fed meeting
minutes, it should not have been an entire surprise," said Fred
Dickson, chief market strategist at D.A. Davidson & Co. in Lake
Despite the concerns about the effects of its asset
purchases, the Fed look set to continue its open-ended stimulus
program for now.
Stocks pushed the S&P 500 index 4.3 percent higher in the
previous two sessions. On Thursday investors turned their focus
to coming battles in Congress, including the likelihood of
bitter fights over budget cuts and raising the federal debt
"We were definitely technically extended and ripe for a
little bit of a consolidation and today is very orderly -
traders and investors are still trying to digest the language
and the details from the 2012 taxpayer act," Dickson said.
The Dow Jones industrial average dropped 21.19
points, or 0.16 percent, to 13,391.36. The Standard & Poor's 500
Index shed 3.05 points, or 0.21 percent, to 1,459.37. The
Nasdaq Composite Index lost 11.70 points, or 0.38
percent, to 3,100.57.
Economic data showed U.S. private-sector employers shrugged
off a looming budget crisis and stepped up hiring in December,
offering further evidence of underlying strength in the economy
as 2012 ended.
The government's broader monthly payrolls report, due on
Friday, is expected to show the economy created 150,000 jobs
compared with 146,000 in November, according to a Reuters poll.
The U.S. unemployment rate is seen holding steady at 7.7
Retailers advanced after several major companies in the
sector beat expectations of modest sales increases in December,
with the S&P retail index up 0.4 percent.
Shares in Costco Wholesale Corp rose 1 percent to
$102.49 after the company reported a better-than-expected 9
percent rise in December sales at stores open at least a year.
Gap Inc stock climbed 2.3 percent to $32.09
following news that the retailer will buy women's fashion
boutique Intermix Inc, the Wall Street Journal
Family Dollar Stores Inc stumbled 13 percent to
$55.74 on the company's report of lower-than-expected quarterly
Volume was relatively strong, with about 6.68 billion shares
traded on the New York Stock Exchange, NYSE MKT and Nasdaq,
slightly above the 2012 daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by
1,692 to 1,321, while on the Nasdaq, decliners beat advancers
1,287 to 1,187.