Thursday
October
23
2014
2:24 am
Weather

  Home
  Local News
  State / National / World
  Sports
  Opinion / Letters
  Business
  Arts / Entertainment
  Lifestyle
  Obituaries
  Calendar
  Submit Event
  Comics / Games
  Classifieds
  DJ Designers
  Archives
  Advertise With Us
  About Us
 
 
 
 

Check out our archive of Dining Guides - Yum!

Stocks slip as Fed begins stimulus discussion
December 18, 2013, 05:00 AM By Steve Rothwell The Associated

NEW YORK — Nobody wanted to stick their neck out on Tuesday.

The stock market edged slightly lower as the Federal Reserve started a two-day policy meeting that may herald the beginning of the end for its economic stimulus.

Few expect that the Fed will announce that it plans to pare back, or ‘taper,’ its huge bond-buying program after its meeting wraps up on Wednesday. However, good news on the U.S. economy this month, including a blockbuster jobs report, and a budget deal in Washington appeared to have increased the likelihood of a change.

“It’s just the taper drama, that’s really all the market seems focused on,” said Dean Junkans, CIO for Wells Fargo Private Bank. “The chances of them doing something tomorrow are higher than they were a month ago.”

Major stock indices fell, but just slightly. The Standard & Poor’s 500 index eased five points, or 0.3 percent, to 1,781. The Dow Jones industrial average crept down nine points, or 0.1 percent, to 15,875.26. The Nasdaq composite edged lower by five points, or 0.1 percent, to 4,023. 68.

Eight of the ten industrial groups in the S&P 500 declined, led by phone companies. Materials stocks and technology companies edged higher.

A couple of big companies bucked the downward trend after pledging to hand more cash to stock holders.

Boeing rose $1.16, or 1 percent, to $135.88 after the plane maker increased its stock buyback program by $10 billion and raised its dividend 52 percent. 3M climbed $3.73, or 3 percent, to $131.39 after raising its dividend by 35 percent. The company also forecast solid earnings next year.

Stocks have surged this year as the Fed kept buying $85 billion in bonds every month to hold down long-term interest rates. As well as boosting the economy, that stimulus has made stocks a more attractive investment compared to bonds.

The only setbacks for the market this year have come when investors were nervous that the Fed was about to cut back its stimulus.

The S&P 500 index dropped 1.5 percent in June when Fed Chairman Ben Bernanke outlined a potential exit for the Fed from its stimulus strategy. The index fell 3.1 percent in August when investors thought that the policy would change in September.

Instead of worrying about the market’s immediate reaction to the Fed’s announcement on Wednesday, investors should focus on the positive backdrop for stocks, said Liz Ann Sonders, chief investment strategist at Charles Schwab.

The economy is improving, companies are investing more, and earnings are forecast to grow at a steady rate, ensuring there will be demand for stocks.

“Dips that we get are not going to be terribly severe,” Sonders said.

In government bond trading, the yield on the 10-year Treasury note dropped to 2.84 percent, from 2.88 percent on Monday, as investors bought bonds on a day when the government said consumer prices remained flat. When prices rise, a trend known as inflation, the value of bonds falls.

In commodities trading, the price of gold fell $14.30, or 1 percent, to $1,230 an ounce. Oil dropped 26 cents, or 0.3 percent, to $97.22 a barrel.

Among other trends in the market:

NEW FRONTIER: Frontier Communications rose the most in the S&P 500. The stock jumped 47 cents, or 8.6 percent, to $4.78 after it reached a deal to acquire AT&T’s fixed-line business in Connecticut for about $2 billion.

‘LIKE’ THAT HIGH: Facebook rose to an all-time high after the social media company said that it’s testing video advertisements, creating a potential source of ad revenue. The company’s stock ended the day up $1.05, or 2 percent, at $54.86, after peaking at a record $55.18.

NOSEDIVE: Delta Air Lines fell the most in the S&P 500, dropping 98 cents, or 3.5 percent, to $26.94.

 

 

Tags: percent, after, stock, stocks, investors, bonds,


Other stories from today:

 

 
Print this Page Print this Page  |  Bookmark and Share
<< Back
 
Return To Archives
 
  


 
 
 
Daily Journal Quick Poll
 
Does the terrorist attack near the Canadian Parliament concern you?

Yes, extremely
Yes, somewhat
A little
Not at all

 

 
 
 
 
 
 
Giants fans be wary, man robbed of World Series tickets worth $1,000
With the World Series hot on San Francisco Giants’ fans minds, police are reminding people to be w..
Two dead in shooting attack at Canada's Parliament
OTTAWA, Ontario — A gunman with a scarf over his face shot to death a Canadian soldier standin..
US to track everyone coming from Ebola nations
WASHINGTON — Stepping up their vigilance against Ebola, federal authorities said Wednesday that ev..
Government ups air bag warning to 7.8M vehicles
DETROIT — The U.S. government is telling 3 million more car owners to get their air bags repaired ..
Turkish president says US airdrop to Kurds in Kobani a mistake
ISTANBUL — Turkish President Recep Tayyip Erdogan says that the U.S. made a mistake in airdropping..
More >>  
 
 
  
 
  
 
©2014 San Mateo Daily Journal
San Mateo County election results