Stocks decline as investors weigh Fed stimulus
US stocks traded on the downside Thursday as investors anticipate next Tuesday’s Federal Open Market Committee policy meetings. The markets have been at the mercy of policy talks since Fed Chairman Ben Bernanke first hinted at an asset taper in May. Since that time the mostly bullish markets have reacted sharply to monetary policy expectations.
Adding to Federal Reserve speculation has been ongoing dialogue about Syria. The Arab nation of 23 million has been mired in a bloody civil war that has entered its third year. US Secretary of State John Kerry told rebel allies a military strike on the forces of Bashar al-Assad were still on the table. Kerry was in Geneva Thursday in order to facilitate the transfer of chemical weapons from the Syrian government to international authorities. Russia’s proposal to confiscate Assad’s chemical arsenal staved off what looked like an imminent US-led attack on Syria.
The Standard & Poor’s 500 declined more than 0.3 percent to 1,683.42 after posting seven consecutive days of positive trade. The Dow Jones Industrial Average fell a quarter percent to 15,300.60 after three consecutive days of three-digit gains. Financials were among the Dow’s biggest losers, with JPMorgan Chase & Co (NYSE:JPM) falling close to 2 percent to $52.24, and Bank of America Corp (NYSE:BAC) falling more than 1.1 percent to $14.48. Among the Dow’s biggest gainers were telecommunications, led by AT&T Inc (NYSE:T) and Verizon Communications (NYSE:VM) , which gained at least 1.19 percent.
The NASDAQ Composite fell more than 0.2 percent to 3,715.97 after EZchip Semiconductor (NASDAQ:EZCH) lost more than 20 percent.
Speculation concerning the pace and timing of asset tapering will dominate the trade rounds over the next several days. The majority of economists surveyed this month believe the Fed will taper its monthly bond purchases by $10 billion to $75 billion. Previous estimates pegged the first taper at $20 billion. Weaker-than-projected jobs growth over the past two months has shifted expectations slightly.
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