U.S. stocks retreated, erasing gains in the final hour of trading for a second day, as the Federal Reserve predicted a deeper recession and concern grew that credit-card issuers will be hurt by new lending restrictions.

Benchmark indexes slid as minutes from the Fed’s April meeting showed policy makers believe they may need to boost purchases of bonds to ensure a stronger economic recovery. Capital One Financial Corp. lost 7.2 percent as American Express Co. said U.S. legislation to curb credit-card fees may reduce lending to “consumers who need it.” Hewlett-Packard Co. dropped 5.2 percent on a disappointing sales forecast.

The Standard & Poor’s 500 Index slipped 0.5 percent to 903.47 at 4:09 p.m. in New York, reversing a rally of as much as 1.8 percent. The Dow Jones Industrial Average lost 52.81 points, or 0.6 percent, to 8,422.04. The MSCI Asia Pacific Index rose 0.9 percent, while Europe’s Dow Jones Stoxx 600 Index added 0.5 percent.

(Bloomberg.com)