May 22 - Summary of business headlines and recap of trading action on Wall Street and across Europe. Conway G. Gittens reports.
Wall Street swings from profit to loss after a tug-of-war inside the Federal Reserve appears to be more intense than thought. The market gave up one percent gains to finish the session lower led by a 1.1 percent drop in the Nasdaq. Minutes from the Fed's last meeting show "a number" of policymakers were ready to scale back the central bank's bond buying as early as the upcoming June meeting - in a spirited debate. Economists say Bernanke could agree to begin cutting back on stimulus earlier than thought if he wants to prevent the appearance of policymakers at each other's throats, which could cause the board to lose credibility with investors. Officials on both sides of the debate have spoken since the meeting three weeks ago. The question of when the Fed will begin its exit strategy came up in a Q and A between Republican Congressman Kevin Brady and Fed Chair Ben Bernanke on Wednesday. SOUNDBITE: REPRESENTATIVE KEVIN BRADY, REPUBLICAN, TEXAS (ENGLISH) SAYING: "How much notice will you give the market before you start executing the strategy?" SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "Well, we've explained the strategy and again the market can see the data as well as we can and what we are looking for is increased confidence that the labor market is improving and that that improvement is sustainable and as we see that, we will in steps respond to that by reducing the amount of accommodation in a way that's appropriate and maintains appropriate level of accommodation given the economic outlook." And speaking of that outlook, housing remains a bright spot. Sales of previously owned homes surged to a near 3-1/2 year high. On the corporate front, Hewlett-Packard profits slid 32 percent, but net earnings - not as bad as feared. HP also lifted the low-end of its full-year forecast as services offset a free-fall in PC sales. It was a more disappointing quarter at Target than expected. The No. 2 discount retailer is the latest to blame the weather for sales not living up to expectations. As a result, Target is lowering its full-year profit forecast. In Europe - stocks rallied on hopes central banks will keep pumping money into the global economy.