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)