Market Minute: Markets Swoon on Threat of Higher Interest Rates

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Federal Reserve Board Chairman Ben Bernanke
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Markets around the world are skittish after Fed Chairman Ben Bernanke warned the central bank could begin winding down its bond buying program later this year. That has added uncertainty that's likely to weigh on the market Thursday morning. Pressure is also coming from a 7 percent sell-off in Japanese stocks, and a contraction in China's manufacturing activity.

The Dow industrials (^DJI) fell 80 points Wednesday on the Fed news. The S&P 500 (^GSPC) lost 13 points and the Nasdaq (^IXIC) dropped 38.

Hewlett-Packard (HPQ) is already the best performing Dow stock so far this year, and it's set to soar again today. The tech giant reported an earnings decline of 32 percent, but that beat expectations, and the company raised its outlook for the current quarter.

It's a similar story for the teen retailer Pacific Sunwear (PSUN). Its shares have soared 84 percent this year, and there's more room to run today. The company's loss widened last quarter, but it issued an upbeat outlook for this one.

Struggling retailer J.C. Penney (JCP) has secured a loan for $2.25 billion to fund its planned expansion. That's $500 million more than expected.

Pfizer (PFE) plans to spin off to shareholders its majority stake in Zoetis (ZTS). Earlier this year, Pfizer sold about 20 percent of the animal health company in an IPO that raised $2 billion.

Merck's (MRK) new drug to treat insomnia has received the backing of a Food and Drug Administration advisory panel. It said the product was effective and safe enough at lower dosage levels.

Chinese regulators have given airlines there the go-ahead to begin flying Boeing's (BA) 787 Dreamliner. Chinese airlines have ordered 35 Dreamliners, although none have yet been delivered.

And Tesla Motors (TSLA) has repaid the government's $465 million -- nine years ahead of schedule. Tesla has been high-flying stock this year, but an analyst at Seeking Alpha warns that bigger competitors "are already catching up."

-Produced by Drew Trachtenberg


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20 Comments

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eloise

I wouldn't mind some higher interest on savings, etc. .24% doesn't cut it. The only thing I am making money on now is my Mutual Funds and that is a bit of a roller coaster.

May 23 2013 at 1:57 PM Report abuse +1 rate up rate down Reply
drpmindmender

Gee, Wall Street might have to relearn how to make money the old-fashioned way...

...by EARNINGi it.

May 23 2013 at 1:33 PM Report abuse rate up rate down Reply
stevendy1

swoon ????

May 23 2013 at 1:28 PM Report abuse rate up rate down Reply
scottee

we need higher interest rates.
we need to be a country of savers, not debtors.
we need The Fed audited, preferably ended.
banks need to be accountable to their customers for their profit.

May 23 2013 at 1:16 PM Report abuse rate up rate down Reply
stevendy1

with the record profits that have blessed the companies over the past 5 years,why not raise the interest rates? this 0 to 4% is ridiculous..let the companies use some of their record profits to "buy down" the rate for all of its customers or just lower prices to make up for their ridiculous profit-grabbing....yes, they CAN do it.. the average person needs something to hang onto since the repubs refuse to help the middle class.

May 23 2013 at 1:14 PM Report abuse rate up rate down Reply
dencuddy

Down 0.06% is swooning?

May 23 2013 at 1:01 PM Report abuse rate up rate down Reply
jvinylman502

Just wait until the FED stops printing money to prop up our economy.

May 23 2013 at 12:39 PM Report abuse rate up rate down Reply
thecabinrocks

How about if Bernanke shuts his big fat mouth and stop freaking out the volitile market with verbal speculation.

May 23 2013 at 12:29 PM Report abuse -1 rate up rate down Reply
John De

The Ben Bernanke testimony definitely caused worry on the markets yesterday.

May 23 2013 at 11:53 AM Report abuse +2 rate up rate down Reply
Big John

This is exactly what Warren Buffet and Paul Krugman said would happen when the free money stopped being pumped to the big corporations. Perhaps it is time smart people like "savers" starting making some interest on their savings.

May 23 2013 at 11:51 AM Report abuse +3 rate up rate down Reply
1 reply to Big John's comment
maceandemma

Paul Krugman is a wise man indeed.

May 23 2013 at 12:40 PM Report abuse +1 rate up rate down Reply