S&P 500 declines for the 6th time in 8 days on Fed speculation
US stocks failed to carry their momentum forward into Wednesday as Federal Reserve speculation weighed heavily on investors. The market is locked on a September Fed taper, according to Douglas Cote, chief market strategies at ING. Quantitative easing has pumped more than $3.5 trillion into the economy over the past four years, leaving market participants concerned about excess in the financial system.
The benchmark indices declined in unison on central bank speculation, a common theme over the past two weeks. The Standard and Poor’s 500 declined half a percent to 1,685.39, registering its sixth decline in eight days as the markets consolidate ahead of the September Federal Open Market Committee.
The benchmark gauge was weighed down after Macy’s Inc. cuts profit forecast following weak quarterly sales. The department-store chain lost close to 4.5 percent Wednesday, closing at $46.33 a share. Boeing Co. registered declines in the range of 2 percent after the aerospace company discovered wiring defects in three of its 787 Dreamliners.
Despite Macy’s (NYSE:M) lackluster quarterly earnings, S&P 500 companies have enjoyed a much stronger than expected earnings season, propelling the S&P index to multiple record highs. The S&P 500 has declined almost 1 percent since August 2nd, its most recent record high.
The NASDAQ Composite also registered losses Wednesday, despite Apple (NASDAQ:AAPL) shares hitting a six-month high. The NASDAQ was down more than 0.4 percent to 3,669.27, erasing its Tuesday rebound. The Dow Jones Industrial Average reported losses in the neighbourhood of 0.7 percent, closing Wednesday’s New York session at 15,337.70.
Expectations for bond tapering have intensified in recent weeks, led principally by a strengthening US economy and hawkishness from regional Federal Reserve presidents. The Federal Reserve is likely to reduce its $85 billion in monthly asset purchases at its September policy meetings, according to the two-thirds of economists surveyed by Bloomberg from August 9 to August 13.
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