US stocks fall as market eyes possible Fed retreat
Trader Kevin Lodewick works on the floor of the New York Stock Exchange in this May 2, 2013, file photo. US stocks Wednesday, May 22, 2013, ended lower following a choppy day of trading as the market weighed exit signals on the Federal Reserve’s exceptionally loose monetary policy. AFP PHOTO/RICHARD DREW
NEW YORK—US stocks Wednesday ended lower following a choppy day of trading as the market weighed exit signals on the Federal Reserve’s exceptionally loose monetary policy.
The Dow Jones Industrial Average dropped 80.41 (0.52 percent) to 15,307.17.
The broad-based S&P 500 gave up 13.81 (0.83 percent) at 1,655.35, while the tech-rich Nasdaq Composite Index sank 38.82 (1.11 percent) to 3,463.30.
Stocks had rallied in the morning during the early part of Federal Reserve Chairman Ben Bernanke’s highly anticipated testimony to Congress, but then retreated.
Although Bernanke stressed that current economic conditions did not warrant an end to the Fed’s aggressive stimulus measures, he also said the Fed could pull back in the next few meetings if they improved.
The indices took a decisive downward lurch after the release of Federal Reserve meeting minutes showing some officials had discussed curtailing bond purchases as soon as June.
“They used the world ‘taper’ and no one wants to hear it,” Mace Blicksilver, director of Marblehead Asset Management, said of the minutes.
Technology equities were among the hardest hit. Among the biggest losers were Google (down 1.9 percent), Priceline (down 3.4 percent), Oracle (down 2.8 percent) and Cisco (down 2.8 percent).
Retailer Target dropped 4.0 percent after reporting earnings that missed expectations due to unexpectedly weak sales in apparel and some weather-sensitive products. Net income came in 28.5 percent below the year-ago level.
Dow member General Electric gained 0.9 percent after the company’s chief executive told analysts he expects to spend $6.7 billion more on additional acquisitions by year-end following an April agreement to buy Lufkin Industries for $3.3 billion.
Another Dow member, pharmaceutical giant Pfizer, jumped 1.8 percent after announcing a plan to accept Pfizer shares from the market in exchange for Pfizer-held shares in the company’s animal-health Zoetis spinoff.
Pfizer owns more than 400 million shares in Zoetis, equivalent to 80.2 percent of the company. Zoetis shares added 1.5 percent.
Bond prices tumbled. The yield on the 10-year US Treasury rose to 2.03 percent from 1.94 percent late Tuesday, while the 30-year jumped to 3.21 percent from 3.15 percent. Bond prices move inversely to yields.
