After Market: Stocks Stumble After Hawkish Fed Cuts Stimulus

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The Federal Reserve did what the market expected on Wednesday, and that may have been the problem. It continued to taper -- that is, trim the amount of stimulus it injects into the economy each month. The Fed also dropped a specific target for the unemployment rate, though it vowed to keep short-term interest rates near zero for a considerable period of time. But investors worried about some of the nuances in Janet Yellen's comments.

The market was flat when the Fed statement was released, but immediately turned lower. The Dow Jones industrial average (^DJI) lost 114 points on the day, the Nasdaq composite (^IXIC) lost 25 and Standard & Poor's 500 index (^GPSC) fell 11 points.

KB Home (KBH) took home a 6 percent increase after reporting a profit versus a loss a year ago, but other homebuilders gave back their gains following the Fed news. And despite Wednesday's gain, KB shares are still about 10 percent lower than were a year ago.

Financial stocks were generally higher following the Fed statement.

And FedEx (FDX) stock was flat, which has to be considered a win following a disappointing earnings report. The company said results were "significantly affected by severe winter weather."
A lot of companies have used that excuse recently, but investors apparently believe FedEx.

Elsewhere, Starbucks (SBUX) gained 2 percent. Its CEO told CNBC that it has no plan to raise prices, despite the sharp rise in wholesale coffee prices.

Hewlett-Packard (HPQ) rose another 3.5 percent, on top of Tuesday's big gain. And another IPO debuted with a blowout day. Paylocity (PCTY), which makes cloud-based software, soared 53 percent above its $17 a share IPO price.

First Solar (FSLR) jumped 20 percent after announcing a new pact with General Electric (GE) to develop a photovoltaic power plant. But Solar City (SCTY) fell 5.5 percent after posting earnings that fell shy of expectations.

Some of the biggest names in tech gave back some of their recent gains. Google (GOOG), Facebook (FB) and Amazon (AMZN) all lost about 1 percent.

Finally, Prothena (PRTA) was a standout gainer, soaring 26 percent after presenting some positive data on treating an abnormal build-up in protein.

What to Watch Thursday:
  • The Labor Department reports weekly claims for unemployment benefits at 8:30 a.m. Eastern time.
  • At 10 a.m., the Federal Reserve Bank of Philadelphia releases its March survey of manufacturing activity in the Mid-Atlantic region; the National Association of Realtors reports February existing home sales; Freddie Mac releases weekly mortgage rates; and the Conference Board releases leading indicators for February.
These major companies are scheduled to release quarterly financial statements: -Produced by Drew Trachtenberg.


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29 Comments

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joeyballpark

bt te bu

March 23 2014 at 11:12 AM Report abuse rate up rate down Reply
k4jlp

Just wait until the high speed trading investigation starts going and gets deep. Then when the spotlight shines on the Commodity Markets scams of hedge finds and private equity funds...watch the rats run as the big cat pursues....

March 20 2014 at 6:41 AM Report abuse rate up rate down Reply
siscosdad

Just so everyone knows...the Federal reserve is made up of a dozen of the richest bankers in the world. They are not part of the government, but they control the U.S. economy. Think about it.

March 20 2014 at 4:16 AM Report abuse +3 rate up rate down Reply
texastotenmom

http://www.teaparty-platform.com/ <~~ n lets finally put a stop to obies record unemployment n record foreclosures for the last five years now n bring american jobs back to america n move america forward once again. !!

March 20 2014 at 4:11 AM Report abuse -1 rate up rate down Reply
NJPACKFAN

Time to sell stocks......Interest rates will rise. Get out before it's too late.

March 20 2014 at 2:10 AM Report abuse +2 rate up rate down Reply
jmaltus

Nice job girl.

March 19 2014 at 10:57 PM Report abuse rate up rate down Reply
Larry

It's sick when business reacts negatively to cutting back on government dependency!!!!

March 19 2014 at 10:34 PM Report abuse +3 rate up rate down Reply
kensucharski

What "recovery" is this government talking about?
The CBO talking about Obama care being a financial and insurance disaster?
You mean when the new tax's and increased unemployment rears it's ugly head in 2016?
The unemployeed are still looking for the laser jobs for American growth.

March 19 2014 at 8:33 PM Report abuse -2 rate up rate down Reply
2 replies to kensucharski's comment
Big John

Tell me Ken, why should there have to be a "recovery"? Did Bush have to deal with a recovery after Clinton turned the country over to him? He had a surplus and a robust economy handed to him and you blame Obama for what Bush handed over to him? The worst recession since the Great Depression. Why should Obama have to fix anything if Bush and the GOP did their job for eight years and don't give me this Nancy Pelosi junk because if that is the case why hasn't Boehner fixed things.

March 19 2014 at 9:03 PM Report abuse -1 rate up rate down Reply
4 replies to Big John's comment
republicanslostagain

Don't you think it's kind of strange the Republican party didn't ask Bush to speak at the 2012 RNC ? There is a reason, Big John you couldn't of said it any better than that.

March 19 2014 at 9:37 PM Report abuse -2 rate up rate down Reply
3 replies to republicanslostagain's comment
barrackvpm

The Federal Reserve System was created illegally during Woodrow Wilson's administration and continues to usurp the proper role of Congress in issuing coinage and paper money. Ron Paul is right on point when he says the Federal Reserve System needs to be abolished. America has been a lackey for the Rothschild banking empire since the establishment of the Fed. This family of banking thieves caused America's entry into World War One and ensured that World War Two would take place. America doesen't need another election, we need a revolution to reestablish our country for the people and not the corporations and the bloated military which serves as a tool for Zionist expansion. We currently are trying to tell Russia to stop doing what we do on a regular basis. At least Russia is taking back what belongs to them in the first place. Better hope Mexico doesen't want their territory back: BY, BY Texas, California, New Mexico, and Arizona.

March 19 2014 at 8:30 PM Report abuse +6 rate up rate down Reply
Mr. ROC

The Fed Reserve needs to stop all artificial supports for Wall Street and end it's subsidy of our governments deficit spending. The only companies that should be on the NY stock exchange are companies with sales of goods, not making money on speculating on gas prices or the next wheat crop. If you want to gamble go to Vegas or Atlantic City! Stop costing the American family any more hardships! The two countries in the world that could make things better for the world are having a fit over some beach front property!

March 19 2014 at 7:33 PM Report abuse +1 rate up rate down Reply