Closing Bell: Stocks Slide on Uncertainty Over Tapering of Fed Stimulus

Stock traders work at the New York Stock Exchange, Monday, Aug. 19, 2013, in New York. (AP Photo/Mark Lennihan)
Mark Lennihan/AP
U.S. stock markets ended lower Wednesday after the Federal Reserve showed no clear sign of when it plans to begin drawing down its bond-buying stimulus.

The Dow Jones industrial average (^DJI) fell 105 points, or 0.7 percent, to 14,897, extending its string of losing days to six, the longest since July 2012. The Standard & Poor's 500 index (^GPSC) dropped 9 points, or 0.6 percent, to 1,642, and the Nasdaq composite index (^IXIC) lost 13 points, or 0.4 percent, to 3,599.

The Fed appears on track to slow its bond purchases by the end of this year should the economy continues to improve. But it remains divided over the exact timing of the move, according to minutes from its July interest-rate meeting.

A few policymakers said they wanted to assess more economic data before deciding when to scale back the central bank's $85 billion a month in Treasury and mortgage bond purchases. These policymakers "emphasized the importance of being patient," the minutes said.

Stocks have slumped since Aug. 2, when the Dow and S&P 500 closed at all-time highs. Traders have been worried about weak earnings and have been looking for clarity on how and when the Fed will wind down its bond purchases.

In other economic news, the National Association of Realtors reported that sales of previously occupied homes jumped to an annual rate of 5.39 million in July from 5.06 million in June. Home sales rose to their highest level since November 2009.

Walt Disney (DIS) said it will begin laying off about 175 people in its Disney/ABC television group, about 2 percent of the unit's workforce, Reuters reported, citing a person familiar with the matter. Most of the layoffs will come in technical operations, such as broadcast engineering, and at eight ABC-owned stations across the U.S. But the ESPN cable sports operations isn't included in the cuts.
Disney shares ended Wednesday down 1.2 percent to $61.14 amid a broad market selloff.

More Stocks in the News:
  • Staples (SPLS) shares slumped 15.3 percent to $14.26 after the company reported weaker-than-expected quarterly results on dismal sales in international markets and cut its outlook for the year.
  • Target (TGT) warned its annual profit may be near the low end of its forecast as consumer spending remains cautious, sending shares down 2.5 percent to $65.50.
  • PetSmart (PETM) dropped 5.3 percent to $71 after its results, while American Eagle Outfitters (AEO) tumbled 9.9 percent to $14.76 after giving a weak outlook.
  • But home improvement chain Lowe's (LOW) rose 3.9 percent to $45.81 after it reported a bigger-than-expected rise in profit and sales as the housing market's recovery encouraged people to spend more on their homes.
  • Shares of Toll Brothers (TOL) ended virtually unchanged at $31.65 after the largest U.S. luxury homebuilder reported a jump in revenue as the recovery in the housing market gathered pace.
What to Watch Thursday:
  • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
  • At 10 a.m., Freddie Mac reports weekly mortgage rates and the Conference Board releases leading indicators for July.
These major companies are scheduled to report quarterly corporate earnings:
  • Abercrombie (ANF)
  • Aeropostale (ARO)
  • Dollar Tree Stores (DLTR)
  • GameStop (GME)
  • Gap (GPS)
  • Hormel Foods (HRL)
  • Pandora Media (P)
  • Sears Holdings (SHLD)
-Compiled from staff and wire reports.

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I notice my post about the Feds looking into energy market manipulation by JP Morgan crooks did not make it. If you folks knew what was really going on, you would freak. The transfer of wealth from the poor and middle class continues as Congress looks the other way. It's a perfect scam game to dip into your wallets. Do you really think higher stock prices and higher dividends paid out create jobs that pay a living wage?

August 22 2013 at 9:21 AM Report abuse +5 rate up rate down Reply

This is simply their retaliation for the Feds looking into criminal prosecution on Wall Street. It is very simple. It is WWIII and it is the Economy Stupid not a conventional war. That middle east joke is simply a distraction. The rich want two economic classes. The working poor and the ultra rich. This is not going to happen and people should begin to say hell no soon. No more foreign aid until all American Domestic Program are shored up as they are written. Take care of our poor, sick and elderly before giving Billions to other nations. This is insane.

August 22 2013 at 7:55 AM Report abuse +4 rate up rate down Reply

If the CNBC stock analysts would stop blaming Obamaacare for the small business confusion the market would get back to business again.

August 22 2013 at 3:44 AM Report abuse -2 rate up rate down Reply

Apparently the market can't stay up without the Fed buying bonds......

August 22 2013 at 1:27 AM Report abuse rate up rate down Reply

Perhaps most stocks are overpriced.

August 21 2013 at 9:53 PM Report abuse rate up rate down Reply

I have seen a lot of Washington Nuts in my near 70 years........But,,,the ones in the Whitehouse now,,,,,,,,on both sides,,,,are stone crazy.!!!!!!!!!
Where has America taken us too,,,,,,,,,,right is now wrong,,,,,,,,,,,,,,,wrong is now right.!!! up is down,,,,,,down is up.!!!!!!!.....,,,man marries man,,,,,,,,,woman marries woman....... Democrates killing unborn children..........WELFARE,,,,NO ONE WORKS,,,,,,DRAW WELFARE IN THE NAMES OF THE DEMOCRATE VOTES...

August 21 2013 at 8:37 PM Report abuse +1 rate up rate down Reply

Only an idiot would force Obamacare on the taxpayer when the country is BROKE.

August 21 2013 at 8:31 PM Report abuse rate up rate down Reply
3 replies to betty_brock's comment

FIRE THE FED. They keep printing money to prop up Obama's economy and that makes what we have WORTH LESS.

August 21 2013 at 8:29 PM Report abuse -3 rate up rate down Reply
1 reply to betty_brock's comment

We have most of George W's bills paid and now can start to pay some of Obama's.

August 22 2013 at 3:46 AM Report abuse +2 rate up rate down Reply

Oops. My last comment ended up on the wrong post.

August 21 2013 at 7:26 PM Report abuse rate up rate down Reply

Many stocks pay no dividends, especially growth stocks. (Furthermore, very few dividend-paying companies pay out all of their profits in dividends.) By this author's "math", non-dividend paying stocks would all be worth nothing at all now and will still be worth nothing at all when interest rates rise. When the Fed starts tapering it will do so on the expectation of growth in the economy. If the Fed guesses right, growth stocks will fair well in a growing economy. But many will still pay no dividends. Where is the "math" for that?

August 21 2013 at 7:22 PM Report abuse rate up rate down Reply