US stocks decline following post-FOMC rally
US stocks failed to extend their post-FOMC rally as investors digest the Federal Reserve’s latest decision to keep the pace of record stimulus the same. The Standard and Poor’s 500 hit a new record high in the late hours of Wednesday trading, but by Thursday, the exuberance had faded.
Market participants reacted to the latest batch of economic data, which reaffirmed the US economy’s solid footing. According to the Labor Department, jobless claims fell to 309,000 last week, beating expectations by more than 20,000. Sales of previously owned homes in August rose 1.7 percent to 5.48 million, according to the National Association of Realtors. This six-year high comes as buyers rushed to lock-in mortgages before they rise. Monetary policy expectations have pushed mortgage rates to two-year highs, which has reduced the pace of home sales in recent months.
The Philadelphia Fed’s monthly Business Outlook rose to 22.3 in September from an earlier reading of 9.3, as manufacturing activity picked up in the regions of eastern Pennsylvania, southern New Jersey and Delaware.
The benchmark indices traded in a narrow range before ending the day in the red zone. The S&P 500 fell almost 0.2 percent to 1,722.34. The Dow Jones Industrial Average sunk more than 40 points to 15,636.50. Trading volume in S&P 500 stocks was 25 percent higher than the one-month average. Among the market’s biggest losers were UnitedHealth Group (NYSE:UNH) , Hewlett Packard (NYSE:HPQ) and The Walt Disney Company (NYSE:DIS) , having lost at least 2 percent. Rounding out the day’s top gainers were The Travelers Companies, Inc. (NYSE:TRV) and The Home Depot (NYSE:HD) , having added at least 1 percent.
The NASDAQ Composite managed to avoid losses, trading on a gain of 0.15 percent. Apple, Inc. climbed another 1.64 percent to $472.30 on the release of the iOS 7.
The market’s short-lived rally following the September FOMC meetings comes as more investors internalize the eventual fate of quantitative easing. However, the Fed appears to be optimistic about the economy’s long-term growth, a trend that could rub off on market participants before the weekend.
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