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1st LD Writethru: U.S. stocks slump amid Fed minutes, Greece uncertainty

Xinhua, July 9, 2015 Adjust font size:

U.S. stocks suffered big losses Wednesday, as investors were digesting the Federal Reserve's minutes and the latest development in Greek debt crisis.

The Dow Jones Industrial Average shed 261.49 points, or 1.47 percent, to 17,515.42. The S&P 500 tumbled 34.66 points, or 1.67 percent, to 2,046.68. The Nasdaq Composite Index dived 87.70 points, or 1.75 percent, to 4,909.76.

According to the minutes of the Federal Open Market Committee ( FOMC), the policy-setting arm of the U.S. Federal Reserve, the information reviewed for the June 16-17 meeting suggested that real gross domestic product (GDP) of the United States was increasing moderately in the second quarter after edging down in the first quarter.

Labor market conditions improved somewhat further in recent months. Consumer price inflation continued to run below the FOMC's longer-run objective of 2 percent and was restrained significantly by earlier declines in energy prices and decreases in prices of non-energy imports.

"The minutes repeated the meeting-to-meeting and data-dependent guidance of the statement and press conference. For now the bar for domestic data is a little higher than it was before, suggesting September liftoff is unlikely," said Chris Low, chief economist at FTN Financial, in a note.

The uncertainty of Greek debt crisis continued to weigh on Wall Street. Greece has a last chance to strike a debt deal with creditors by the weekend or head to bankruptcy and Grexit, analysts warned.

Euro zone partners said bluntly after the extraordinary summit in Brussels Tuesday that without action, the game would be over for Greece on July 12.

The Greek government gave assurances that a comprehensive and realistic debt deal proposal would submitted on time.

However, the clear ultimatum from Brussels has fueled concern that after five years of austerity and multi-billion euro bailout packages, Greece is heading towards a messy exit from the euro zone.

The heavy sell-offs in Asian equities also dampened investor sentiment. Chinese stocks sank on shattered investor confidence Wednesday, with the benchmark Shanghai Composite Index plummeting 5.9 percent.

Tokyo stocks plunged 3.14 percent Wednesday, with its benchmark Nikkei stocks index falling more than 600 points to close at a nearly two-month low.

The New York Stock Exchange (NYSE) halted trading in all securities starting from 11:32 a.m. EDT, local time, Wednesday, due to an undisclosed technical problem, and resumed floor trading around 3:10 p.m. EDT Wednesday.

NYSE and U.S. government officials said this is a technique issue, not the result of a cyber-attack. FBI said no law enforcement action is needed at NYSE. Endite