Business
Stocks Slip After Fed Statement; Dollar Gains
Traders work on the floor of the New York Stock Exchange Wednesday, Oct. 29, 2014. Major stock indexes traded in a tight range in the early going as investors wait for word from the Federal Reserve and mull over a mixed batch of earnings results. (AP Photo/Richard Drew)
MATTHEW CRAFT, AP Business Writer
NEW YORK (AP) — Major U.S. stock indexes slipped Wednesday after the Federal Reserve said it was shutting down a bond-buying program because the economy no longer needs as much help. Gold and bond prices fell and the dollar jumped against other major currencies as investors anticipated higher interest rates.
KEEPING SCORE: The Standard & Poor’s 500 index fell nine points, or 0.5 percent, to 1,975 as of 3:26 p.m. Eastern time. The Dow Jones industrial average fell 70 points, or 0.4 percent, to 16,938. The Nasdaq composite fell 27 points, or 0.6 percent, to 4,535.
FED WATCHING: At the end of a two-day meeting, the Fed confirmed that it had ended its $4 trillion bond-buying program, known as quantitative easing, citing “underlying strength in the broader economy.” It also reaffirmed its plan to keep its benchmark short-term rate near zero “for a considerable time.” Most economists think that the Fed won’t raise that rate until the middle of next year.
LONG VIEW: Marty Leclerc, chief investment officer at Barrack Yard Advisors, said that history suggests the market should be able to handle an interest rate increase. “The stock market typically peaks more than two years after the first Fed-funds rate hike,” he said. “So if you think the ball game is over for the bull-market run, you’re saying this time is going to be different.”
COMMODITIES: Gold fell $20.40, or 1.6 percent, to $1,209.20 an ounce. Benchmark U.S. crude rose 78 cents to $82.20 a barrel on the New York Mercantile Exchange.
CURRENCIES, BONDS: The ICE dollar index rose 0.6 percent to 85.96. U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.34 percent.
FACEPLANT: Facebook lost 6 percent after its chief financial officer said that expenses for the social networking giant could increase by as much as 75 percent next year as it ramps up spending on investments. Its stock dropped $4.94 to $75.83.
EXPLOSION IN THE SKY: Orbital Sciences Corporation sank following news that its Antares rocket exploded moments after lifting off from its launch pad on Tuesday. The rocket was carrying a supply ship for astronauts on the International Space Station, part of Orbital’s contract with NASA. Orbital’s stock plunged $4.41, or 15 percent, to $25.96.
IN THE GAME: Videogame maker Electronic Arts rose $1.57, or 4 percent, to $39.05 after its earnings came in ahead of analysts’ estimates and it raised its profit projections for the year. Sales of FIFA 14, a soccer game, and Titanfall, a first-person shooter game, helped results.
PROFITS UP: Solid earnings from Caterpillar, Microsoft and other big companies have helped the market recover from a deep slide earlier this month. Nearly half of the big companies in the S&P 500 index have turned in third-quarter results, and more than seven out of 10 have trumped analysts’ targets, according to S&P Capital IQ. Earnings are on track to rise 6 percent for the third quarter.
BOUNCED BACK: The S&P 500 index is now up half a percent for the month of October. The benchmark index had slumped as much as 6 percent on October 15, as a host of concerns sent markets tumbling.
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