US stocks fall as Fed’s tapering timeline stays unclear
In this Tuesday, Aug. 13, 2013, photo, trader John Santiago, left, and John Liotti work on the floor of the New York Stock Exchange. Wall Street appears headed for a lower opening Wednesday, Aug. 21, 2013, based on futures trading. AP
NEW YORK CITY—US stocks finished a choppy day lower Wednesday after minutes from the Federal Reserve’s last policy meeting gave no more clarity on the central bank’s plans for its stimulus program.
The Dow Jones Industrial Average fell 105.44 (0.70 percent) to 14,897.55.
The broad-based S&P 500 dropped 9.55 (0.58 percent) to 1,642.80, while the Nasdaq Composite Index gave up 13.80 (0.38 percent) at 3,599.79.
Minutes of the July 30-31 meeting of the Federal Open Market Committee showed the Fed continued to debate the timing of pulling back its $85 billion per month in bond-buying purchases.
Art Hogan, head of product strategy at Lazard Capital Markets, said the vagueness of the Fed’s position raised uncertainty.
“The market would like more clarity and it’s not getting that,” Hogan said. “The market is reacting to this vacuum of new news and selling off.”
Visa rose 3.0 percent following reports that the Federal Reserve intends to appeal a US federal court ruling that could limit the fees Visa can charge merchants. A July 2013 US District Court ruling that said the Fed should do more to limit the fees had sent Visa shares sharply lower.
Biopharmaceutical company Incyte shot up 33.5 percent after reporting that a test of its ruxolitinib drug for metastatic pancreatic cancer led to a six-month survival rate of 42 percent compared with 11 percent for a placebo group.
Lowe’s gained 3.9 percent after earnings jumped 26 percent and the company raised its full-year profit forecast from $2.05 per share to $2.10. The company’s outlook has improved thanks to the resurgent housing market.
Target dropped 3.6 percent after earnings fell 13.2 percent and the company said full-year profits would be at the low end of guidance. The retailer cited “continued cautious spending by consumers in the face of ongoing household budget pressures” in the US.
Staples sank 15.3 percent after earnings dropped 14.9 percent and the company projected full-year earnings at $1.21-$1.25 per share, below the $1.32 forecast by analysts. Second-quarter results were “weaker than expected,” the company said.
Bond prices fell. The yield on the 10-year US Treasury bond rose to 2.86 percent from 2.81 percent Tuesday, while the 30-year increased to 3.88 percent from 3.85 percent. Bond prices and yields move inversely.
