After Market: Stocks Stumble After Hawkish Fed Cuts Stimulus

×

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.


Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Basics Of The Stock Market

Stock Market 101 - everything you need to know but were afraid to ask!

View Course »

Add a Comment

*0 / 3000 Character Maximum

32 Comments

Filter by:
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
bamy.demsjail2014

any even "mention" of raising the interest rates will catapult this country from obummers "great recession" in which we still are in today, into his "great depression. !!!

March 20 2014 at 4:40 AM Report abuse -1 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
militiaman2013

Hawkish Fed LMAO what goes around.... cut unemployment benefits and food stamps for the poor and it's a 1% joke, cut the hand outs for the 1% and watch them cowar

March 19 2014 at 10:49 PM Report abuse +1 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