After Market: Taper Fears Rein in Eager Investors; Merger OK Lifts Airlines

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Stocks retreated Tuesday on new worries the Federal Reserve is ready to tap the brakes on the economy. Two regional Fed presidents indicated in separate interviews that the Fed is nearing the point when it begins to trim how much stimulus money it provides each month: Atlanta Fed President Dennis Lockhart said the tapering could start as soon as next month. Dallas Federal Reserve President Richard Fisher likewise suggested investors get ready for a taper, though he emphasized that wider monetary policy would stay loose for the time being.

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The Dow Jones industrial average (^DJI) fell 32 points to 15,751. The S&P 500 (^GPSC) lost 4 to close at 1,768, and the Nasdaq (^IXIC) closed flat at 3,920.

Airline stocks soared above the rest of the market, after the Justice Department agreed to a compromise that will allow American Air and U.S. Airways (LCC) to complete their 16-billion dollar merger.

The Justice Department had sought to block the deal on antitrust grounds, concerned it would reduce competition. The two carriers agreed to mitigate that fear by selling slots at Washington's Reagan National, LaGuardia in New York, and five other big city airports.

Shares of American, which is still operating in bankruptcy, soared 25 percent, though it still trades below $2.50 a share. U.S. Airways edged up 1 percent and other carriers rallied. United (UAL) rose 4 percent, Delta (DAL) gained 2 percent and JetBlue (JBLU) jumped 6 percent.

Dish Network (DISH) gained 6 percent. The company swung to a profit last quarter and added subscribers for its satellite TV service.

On the Downside:
  • The luxury carmaker Tesla (TSLA) lost 4 percent on unconfirmed reports it may face a recall after several fires that may be tied to its electric battery. But the company says that's not true.
  • The cloud computing firm Rackspace (RAX) slid 12 percent after earnings bad missed expectations.
  • And the day's big loser was Sarepta Therapeutics (SRPT). Its shares plunged 64 percent as the FDA raised doubts about a drug trial to test its product to treat a form of muscular dystrophy. The agency indicates that a larger trial may been needed, and that could take a lot of time.

- Produced by Drew Trachtenberg.

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8 Comments

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Ronald Malozi

The current boom in the Dow is from market manipulation from the bankers using bailout money to drive stock and commodities up. An end to that is coming.

November 16 2013 at 3:36 AM Report abuse rate up rate down Reply
paddleman1928

there will be NO taper-this Fed action is basically legalized theft, as I see it. The FED prints money out of thin air(basically free money)-and then buys US debt which is backed by the assets(parks, dams, roads, airports, etc..) . So when the time comes to collect and the US cannot pay its bills the FED will become owner of a lot of real estate/capital projects. All for FREE.

November 15 2013 at 5:00 PM Report abuse +1 rate up rate down Reply
bobdaily99

DOW hit all time high! My stock fund up 31% year to date! My Savings accounts pay 0.05%. I see no where else to put my money.

November 15 2013 at 4:39 PM Report abuse rate up rate down Reply
frank1946

Weak Demand based on Paper Economy.

Yellen makes it worse.

Should have been Esther George !

French Economic Policy won't work in America.

November 15 2013 at 8:59 AM Report abuse +1 rate up rate down Reply
rkeeeballs

Stimulus has worked well....can't go on forever. Should cut back 10% per month for the next 10 months... :>)

November 15 2013 at 7:25 AM Report abuse +1 rate up rate down Reply
Frank and Barbar

The question to ask is when will the economy return to a normal level and these big Corporations start to rehire on the scale that they let people go before the great recession. The stock market is at an all time high, and the worst participation rate for labor in 40 years.

November 12 2013 at 11:35 PM Report abuse -1 rate up rate down Reply
1 reply to Frank and Barbar's comment
mcgowann

The stock market is NOT an indicator of the economy. Since the interest rates are so low, people are not buying bonds or CDs. They aren't investing in realestate because those markets are still not very strong. Banks don't want to lend money at such low interest rates and have it tied up in long term loans at such low rates. Bankers and investors are borrowing money at low rates and investing it in the stock market. Therefore we have a stock market bubble, just like the housing bubble, that will drop like a rock when the Federal Reserve stops it Quantitative Easing policy of pumping $85 billion a month into the economy through the stock market.

This is actually a hidden "Trickle Down" economic policy. But since that is a bad word in liberal circles, doing it through the Federal Reserve instead of the Treasury insulates Obama and Congressional Demcrats.

November 15 2013 at 7:09 PM Report abuse rate up rate down Reply
sandi

there is no trust in this economy,which translates to POTUS

November 12 2013 at 6:06 PM Report abuse -1 rate up rate down Reply
1 reply to sandi's comment
bobdaily99

How trustworthy was Hoover? or Bush?

November 15 2013 at 4:41 PM Report abuse rate up rate down Reply