The Standard & Poor’s 500 Index recovered most of a 1.2 percent morning slide as Hewlett-Packard Co. led gains in technology shares. Global equities slid, with Japanese shares plunging the most since the aftermath of the Fukushima disaster. Copper sank and the yen rallied.
U.S. stocks retreated, giving benchmark indexes their first back-to-back drops in one month, as a contraction in China manufacturing offset American housing data and investors weighed Federal Reserve stimulus comments.
The 21 primary dealers that trade securities directly with the Federal Reserve Bank of New York, said that confusion about the central bank’s intentions for its bond-buying program is reducing the policy’s effectiveness.
Federal Reserve Bank of San Francisco President John Williams, emphasizing the need for policy flexibility, said any move to reduce the pace of the central bank’s bond buying could be followed by an increase should the economy weaken again.
Federal Reserve Bank of New York President William C. Dudley said policy makers will know in three to four months whether the economy is healthy enough to overcome federal budget cuts and allow the central bank to begin reducing record stimulus.