Wall Street slipped from record highs amid comments by a US Federal Reserve official that the central bank should start tapering its bond-buying program next month.
In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.32 per cent, the Standard & Poor's 500 Index eased 0.20 per cent and the Nasdaq Composite Index slipped 0.07 per cent. Declines in shares of Intel, last down 1.3 per cent, and Travelers, last down 1.1 per cent, weighed on the Dow.
Investors might be relying too much on the Fed's stimulus program, Dallas Fed President Richard Fisher said in a speech in Portland, Oregon.
"A corollary of reining in this massive monetary stimulus in a timely manner is that financial markets may have become too accustomed to what some have depicted as a Fed 'put'," Fisher said. "Some have come to expect the Fed to keep the markets levitating indefinitely. This distorts the pricing of financial assets, encourages lazy analysis and can set the groundwork for serious misallocation of capital."
"I am of the opinion that unless we see some disturbing data ... that we should start in September," Fisher told reporters after the speech, adding that he is not alone at the Fed in that view, according to Reuters.