Stocks Tumble after Fed Statement
Stocks fell sharply in late trading on Wednesday to finish the day at session lows after the Federal Reserve released its latest monetary policy statement. Although the Fed said in its statement that it will maintain its $85 billion a month bond buying program, comments from Fed Chairman Ben Bernanke suggest that the central bank plans to start easing its bond buying program later this year.
The Fed said in its statement that it will continue with its bond buying program even as its raised its outlook for GDP growth in 2014 and noted the ongoing improvement in the labor market. However, Bernanke, in a press conference, later noted that the central bank might start tapering its bond buying program by the end of this year if the economy continues to improve.
Following Bernanke’s comments, all three major indexes tumbled. The Dow Jones ended the day 1.35% lower at 15,112.19, the S&P 500 ended the day 1.39% lower at 1,628.93, and the Nasdaq ended the day 1.12% lower at 3,443.20.
All sectors in the S&P 500 ended the day sharply lower. Telecom stocks led the losses, ending the day 2.25% lower. Utilities also tumbled, ending the day 2.23% lower. Basic Materials sector ended the day 1.62% lower.
Among the major movers on Wednesday were Apple Inc. (NASDAQ: AAPL), which ended the day 2.03% lower at $423, AT&T Inc. (NYSE: T), which ended the day 2.54% lower at $35.25, and Adobe Systems Incorporated (NASDAQ: ADBE), which ended the day 5.58% higher at $45.78.
European markets ended mostly lower on Wednesday, with the FTSE 100 Index in London closing 0.40% lower, and the CAC 40 Index in Paris closing 0.55% lower. Asian markets ended on a mixed note overnight, with the Nikkei 225 Index in Japan closing 1.83% higher, and the Hang Seng Index in Hong Kong closing 1.13% lower.