Watch CBSN Live

Stocks shorten drop after Federal Reserve release

U.S. stocks slid for a second straight session on Wednesday, as investors worry about slowing global growth and the specter of higher U.S. interest rates.

Equities dialed back on their sharp losses after the afternoon release of minutes from the Federal Reserve's July meeting, which indicated central bankers were readying to raise short-term interest rates for the first time since 2006. Forecasters have said odds are about even that the central bank would move on rates at its Sept. 28-29 meeting.

Joy Global (JOY) and DuPont (DD) led losses as the commodity and industrial sectors fell. Target (TGT) shares jumped after the retailer reported better than expected earnings. Analog Devices (ADI) rose after its fourth-quarter profit and revenue topped Wall Street's expectations.

"This market will have a great deal of difficulty finding a bid until we see some stabilization in energy prices," Art Hogan, chief market strategist at Wunderlich Securities. "We have a very mixed message going on about the consumer. Yesterday Home Depot (HD) blow out and WalMart (WMT) stunk up the joint. Today Target (TGT) crushed it and Lowe's (LOW) was lackluster at best, there is no common threat to the consumer spending story."

The Standard & Poor's 500 (SPX) dropped 17 points, or 0.8 percent, to 2,080. The Dow Jones Industrial Average (DJI) shed nearly 163 points, or 0.9 percent, to 17,349. The Nasdaq Composite (COMP) lost 40 points, or 0.8 percent, to 5,019.

Emerging-market stocks dropped to a four-year low, with European equities joining the slide.

Ahead of Wednesday's open, stock futures briefly trimmed losses as a report showed the cost of living climbing 0.1 percent last month, its slowest rate in three months.

"Inflation was somewhat weaker than expected in July on a monthly basis, but that should not deter the Federal Open Market Committee from raising the federal funds target rate when it meets in mid-September," Stuart Hoffman, chief economist at PNC Financial Services, said in an email. "Economic growth has picked back up again in the middle of 2015. [It] should be enough for a September rate increase."