US STOCKS-Market falls as Fed minutes weigh

(Updates with reaction to Fed minutes)

NEW YORK, April 8 (Reuters) - U.S. stocks fell on Tuesday, and the Nasdaq dropped more than 1 percent as minutes from the Federal Reserve's latest policy meeting highlighted the central bank's concern that the U.S. economy will contract in the first half of 2008 as the housing slump takes a toll.

The Dow Jones industrial average .DJI slid 70.02 points, or 0.56 percent, at 12,542.41. The Standard & Poor's 500 Index .SPX declined 10.60 points, or 0.77 percent, to 1,361.94. The Nasdaq Composite Index .IXIC fell 23.30 points, or 0.99 percent, to 2,341.53. (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)