Dow logs 6-day losing streak to close below 15000 after Fed minutes
By: JeeYeon Park | CNBC.com Stock Market Writer
Stocks tumbled again in the final hour of
trading to close near session lows in heavily volatile trading
Wednesday, with the Dow posting its sixth-straight day in the red, as
investors digested the minutes from the latest Fed policy meeting."The Fed must be feeling significant political and global pressure to
begin tapering because their language described in today's minutes
release does not correspond to the current macro economic climate of the
country," wrote Todd Schoenberger, managing partner at LandColt
Capital. "More importantly, the risk of reducing QE is higher than
maintaining the current program because the negative impact would
multiply if the Fed cut too soon, and had to revert back to the current
bond buying schedule."
"Bottom line: Wall Street traders are angry and confused by today's release," he added.
Stocks initially spiked lower following the minutes but rebounded within a half hour to wipe out all of the day's losses. Selling renewed aggressively into the close, with the major averages closing near session lows.
"Bottom line: Wall Street traders are angry and confused by today's release," he added.
Stocks initially spiked lower following the minutes but rebounded within a half hour to wipe out all of the day's losses. Selling renewed aggressively into the close, with the major averages closing near session lows.
| Name | Price | Change | %Change | ||||
|---|---|---|---|---|---|---|---|
| DJIA | Dow Jones Industrial Average | 14897.55 | -105.44 | -0.70% | |||
| S&P 500 | S&P 500 Index | 1642.80 | -9.55 | -0.58% | |||
| NASDAQ | Nasdaq Composite Index | 3599.79 | -13.80 | -0.38% |
The Dow Jones Industrial Average slumped 100 points again after briefly cutting its losses. The Dow is set to close below the psychologically-important 15,000 mark for the first time
since July 3.
The blue-chip index has plunged nearly 700 points, or approximately 4.5 percent, from its record high of 15,658.36 on Aug. 2.
The S&P 500 and the Nasdaq also finished in negative territory.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped near 16.
Most key S&P sectors traded in negative territory, dragged by utilities and financials.
What sector will soar in 15 years?
Mike Vogelzang, Boston
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The Federal Reserve is considering a new
tool to help it drain cash from the banking system and keep short-term
interest rates at their targeted level when it decides to shift away
from its current ultra-loose monetary policy, according to minutes of
the Fed's latest policy meeting.
Benchmark 10-year Treasury note yields hit a fresh session high of 2.884 percent following the minutes. Yields have surged recently to two-year highs on expectations the Fed will soon slow its $85 billion monthly purchases of Treasuries and mortgage-backed securities. Other assets around the world have also been hit, with riskier emerging markets getting especially hammered.
(Read more: Three reasons everyone is dead wrong about bonds)
Benchmark 10-year Treasury note yields hit a fresh session high of 2.884 percent following the minutes. Yields have surged recently to two-year highs on expectations the Fed will soon slow its $85 billion monthly purchases of Treasuries and mortgage-backed securities. Other assets around the world have also been hit, with riskier emerging markets getting especially hammered.
(Read more: Three reasons everyone is dead wrong about bonds)
Fed impact on housing
Following the release of Fed
minutes, Ken Rosen, of Rosen Consulting Group, joins Zane Brown, Lord
Abbett; Gina Sanchez, Chantico Global; and CNBC's Steve Liesman, Bob
Pisani and Rick Santelli to discuss the Federal Reserve's impact on the
housing market.
Among earnings, Target declined after the retail giant warned its annual earnings will likely be near the lower end of its previous forecast as the company anticipates ongoing cautious consumer spending.
Staples plunged to lead the S&P 500 laggards after the office supplies retailer posted earnings and revenue that missed projections, citing weakness in its retail stores and international operations.
American Eagle Outfitters dropped sharply after the teen apparel retailer issued disappointing guidance for the crucial back-to-school quarter. Additionally, the company said same-store sales will drop by a mid-to-high single digit percentage in the current quarter. Rivals Abercrombie & Fitch and Aeropostale also declined.
Meanwhile, Lowe's rallied to lead the S&P 500 gainers after the home-improvement company topped quarterly expectations and boosted its full-year outlook. The news came a day after rival Home Depot posted strong earnings results.
Hewlett-Packard edged lower after the company reassigned Dave Donatelli, the executive vice president in charge of the firm's enterprise group to a new role. Donatelli's new role will be announced when the company posts its quarterly results after the closing bell.
L Brands, parent company of Victoria's Secret, is also slated to post earnings after the closing bell.
Apple climbed, bucking the downward trend of the broader markets, after UBS raised its price target on the iPhone maker to $560 from $500.
Goldman Sachs experienced a glitch on Tuesday that resulted in a large number of erroneous single stock and ETF options trades. Many of the trades may wind up being erased, but the error could still cost the firm over $100 million, according to a person familiar with the situation.
On the economic front, existing home sales jumped 6.5 percent in July to an annualized rate of 5.39 million, according to the National Association of Realtors. Economists in a Reuters survey expected a total of 5.15 million annualized units versus 5.08 million annualized units in June.
Weekly mortgage applications declined for a second week and rising interest rates put a damper on refinancing activity, according to data from the Mortgage Bankers Association.
Staples plunged to lead the S&P 500 laggards after the office supplies retailer posted earnings and revenue that missed projections, citing weakness in its retail stores and international operations.
American Eagle Outfitters dropped sharply after the teen apparel retailer issued disappointing guidance for the crucial back-to-school quarter. Additionally, the company said same-store sales will drop by a mid-to-high single digit percentage in the current quarter. Rivals Abercrombie & Fitch and Aeropostale also declined.
Meanwhile, Lowe's rallied to lead the S&P 500 gainers after the home-improvement company topped quarterly expectations and boosted its full-year outlook. The news came a day after rival Home Depot posted strong earnings results.
Hewlett-Packard edged lower after the company reassigned Dave Donatelli, the executive vice president in charge of the firm's enterprise group to a new role. Donatelli's new role will be announced when the company posts its quarterly results after the closing bell.
L Brands, parent company of Victoria's Secret, is also slated to post earnings after the closing bell.
Apple climbed, bucking the downward trend of the broader markets, after UBS raised its price target on the iPhone maker to $560 from $500.
Goldman Sachs experienced a glitch on Tuesday that resulted in a large number of erroneous single stock and ETF options trades. Many of the trades may wind up being erased, but the error could still cost the firm over $100 million, according to a person familiar with the situation.
On the economic front, existing home sales jumped 6.5 percent in July to an annualized rate of 5.39 million, according to the National Association of Realtors. Economists in a Reuters survey expected a total of 5.15 million annualized units versus 5.08 million annualized units in June.
Weekly mortgage applications declined for a second week and rising interest rates put a damper on refinancing activity, according to data from the Mortgage Bankers Association.
@JeeYeonParkCNBC) What's Happening This Week:
THURSDAY: Jobless claims, PMI manufacturing index flash, FHFA home price index, leading indicators, natural gas inventories, Fed's Fisher speaks, Fed balance sheet/money supply, Walmart summit; Earnings from Dollar Tree, Gamestop, Gold Fields, Hormel Foods, Sears, Abercrombie & Fitch, Autodesk, Gap, Marvell, Ross Stores, Aeropostale, Pandora
FRIDAY: New home sales; Earnings from Ann, Foot Locker
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