Stocks fade after Fed discloses split on stimulus
NEW YORK — A two-day rally in the stock market came to an end on Thursday afternoon when an account of the Federal Reserve's last meeting revealed a split between bank officials over how long the Fed should keep buying bonds to support the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then slid into the red about 2 p.m. after the Fed released the minutes from its December meeting.
The Dow ended with a loss of 21.19 points at 13,391.36.
The S&P 500 lost 3.05 points to 1,459.37, and the Nasdaq composite fell 11.70 to 3,100.57.
At last month's meeting of the Federal Reserve's policy-making committee, the central bank pledged to buy $85 billion of Treasurys and mortgage-backed bonds and keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent.
On Thursday, the minutes from that meeting showed Fed officials were divided over the bond purchases. Some of its 12 voting members thought they should continue through this year, while another group thought they should be slowed or stopped much earlier. Just “a few” members saw no need for a time frame, according to the minutes.
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed.
UnitedHealth Group led the Dow lower.
The insurance giant's stock fell $2.55 to $51.99 when analysts at Deutsche Bank and other firms cut their ratings on the stock.
The Dow soared 308 points on Wednesday, its largest point gain since December 2011.
The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the “fiscal cliff.”
That deal gave the market a jump-start into the new year. The Dow and the S&P 500 are up more than 2 percent.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Ambridge’s PittMoss takes off with help from TV show, Mt. Lebanon native Cuban
- U.S. Steel to debut oil, gas pipeline connector
- Alcoa among 13 firms in $140B carbon-footprint pledge
- Israel’s Teva drops bid for Mylan, buys Allergan for $40.5B
- Federal safety regulators go into bulldog mode on how automakers handle recalls
- Muni bond funds stressed
- Pitt to start Energy Law and Policy Institute
- Plummeting natural gas prices slash revenue of Marcellus shale producers
- Wabtec moves to buy France-based transport company
- Stocks in slump as Chinese shares plunge
- Invasive beetle costs Pittsburgh-area power companies plenty