Uncertainty of Fed 'tapering' sends markets lower
By The Associated Press
Published: Wednesday, June 12, 2013, 8:09 p.m.
NEW YORK — The stock market ended lower on Wednesday as traders looked ahead to a critical Federal Reserve meeting next week.
Without any major economic news, traders grappled with the question hanging over financial markets: When will the Fed and other central banks pull back their economic stimulus programs?
The Dow Jones industrial average fell 126 points, or 0.8 percent, to 14,995. The Dow had its first three-day loss of the year and its second close below 15,000 in the past month.
“There's nothing concrete out there to turn us around today,” said Russell Croft, co-portfolio manager at the Croft Value Fund in Baltimore. “So naturally enough, people are back to thinking about the Fed.”
The Dow was up as much as 119 points in the first few minutes of trading, then drifted lower throughout the day.
The Standard & Poor's 500 index fell 13 points, or 0.8 percent, to 1,612. All 10 industry groups in the S&P 500 index dropped, led by consumer-discretionary and utility companies.
The Nasdaq composite sank 36.52 points, or 1 percent, to 3,400.43.
Markets have turned turbulent in recent weeks as traders start preparing for a time when central banks around the world aren't pumping as much money into the financial system.
Two of the top-performing stocks in the S&P 500 this year, Netflix and BestBuy, led consumer-discretionary companies down. Netflix lost $6.82, or 3 percent, to $207.64. BestBuy dropped $1.01, or 4 percent, to $26.88. GameStop fell $1.13, or 3 percent, to $36.69.
The S&P 500 has lost 3.4 percent since reaching a record high on May 21. The next day, Fed chairman Ben Bernanke said the central bank could decide to scale down its bond-buying program in the coming months if the economy looks strong enough.
Since then, the discussion among investors has centered on what will happen when the Fed shifts course. “‘Tapering' is definitely the word of the month,” Croft said.
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