Stocks end near lows after budget deal, S&P below 1800; Vix spikes 10%
By: JeeYeon Park | CNBC.com Writer
Stocks dropped sharply for a second
session Wednesday, with the S&P 500 and Nasdaq seeing their biggest
losses in nearly five weeks, as the provisional budget deal in
Washington raised speculation that the Federal Reserve could pull back
on its stimulus program soon.
| Name | Price | Change | %Change | ||
|---|---|---|---|---|---|
| DJIA | Dow Jones Industrial Average | 15843.53 | -129.60 | -0.81% | |
| S&P 500 | S&P 500 Index | 1782.22 | -20.40 | -1.13% | |
| NASDAQ | Nasdaq Composite Index | 4003.81 | -56.68 | -1.40% |
The Dow Jones Industrial Average slumped more than 100 points, falling from its psychologically-important 16,000 mark. Nike and UnitedHealth led the blue-chip laggards, while Visa climbed.
The S&P 500 fell below 1,800, while the tech-heavy Nasdaq slumped more than 1 percent. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked above 15.
Most key S&P sectors were in the red, dragged by health care and materials.
The S&P 500 fell below 1,800, while the tech-heavy Nasdaq slumped more than 1 percent. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked above 15.
Most key S&P sectors were in the red, dragged by health care and materials.
Closing Bell Exchange
Discussing the Fed's
influence on the bull market rally and the economy, with Mary Ann
Bartels, Merrill Lynch Wealth Management; Adam Thurgood, HighTower;
Keith Fitz-Gerald, Money Map Press; Don Schreiber, WBI Funds; and CNBC's
Rick Santelli.
Late Tuesday, Senate Democrats and
Republicans reached a deal to reduce automatic spending cuts and the
deficit levels by $23 billion over two years.
The bipartisan budget agreement still needs to pass a vote in the Republican-controlled House, expected to take place by Friday, as well as a vote in the Democrat-controlled Senate shortly thereafter. Analysts told CNBC they believed the deal would be passed with policymakers looking to avert another damaging government shutdown like the one seen in October.
(Read more: Cramer: 'Somethingup' with DC's budget deal)
Investors have also been focused over the timing of a reduction in the U.S. Federal Reserve's stimulus program and will be looking ahead to the Federal Open Market Committee's (FOMC) last policy meeting of the year, next Tuesday and Wednesday.
Separately, Dow Jones reported that the White House is close to nominating former Bank of Israel Governor Stanley Fischer as vice chair to the Federal Reserve.
(Read more: S&P downgrades US growth forecast)
The bipartisan budget agreement still needs to pass a vote in the Republican-controlled House, expected to take place by Friday, as well as a vote in the Democrat-controlled Senate shortly thereafter. Analysts told CNBC they believed the deal would be passed with policymakers looking to avert another damaging government shutdown like the one seen in October.
(Read more: Cramer: 'Somethingup' with DC's budget deal)
Investors have also been focused over the timing of a reduction in the U.S. Federal Reserve's stimulus program and will be looking ahead to the Federal Open Market Committee's (FOMC) last policy meeting of the year, next Tuesday and Wednesday.
Separately, Dow Jones reported that the White House is close to nominating former Bank of Israel Governor Stanley Fischer as vice chair to the Federal Reserve.
(Read more: S&P downgrades US growth forecast)
Cashin says: Traders expect market moving Fed statement
CNBC's Bob Pisani and Art
Cashin, of UBS, discuss the acceleration in the euro, and what traders
expect to hear from the Fed next week.
MasterCard
jumped after the credit card company announced a 10-for-1 stock split
and raised its quarterly dividend by 83 percent. The company also
announced a new $3.5 billion buyback program. MasterCard's shares have
gained almost 60 percent this year. Rival Visa also traded higher.
Groupon rallied after Wells Fargo upgraded the daily-deals website to "outperform" from "market perform," citing the company's successful expansion beyond its daily deals origins and is taking more market share in the local commerce market.
Pandora tumbled sharply after rival Spotify launched a free music service for smart phones and tablets and confirmed it will offer a free version of its service for mobile phones and tablets. In addition, Spotify signed an exclusive deal that will bring Led Zeppelin's back catalogue to the streaming service.
Among earnings, Costco slid after the wholesale retailer posted earnings that missed expectations due to lower gasoline prices and weaker foreign currencies.
Joy Global dropped after the mining equipment company posted earnings that fell short of expectations by a penny a share and reported fiscal 2014 guidance that missed estimates.
Oil and gas pipeline operator Valero Energy Partners and owner of Chinese auto websites Autohome both surges in their market debuts.
Hotel chain Hilton Worldwide is expected to announce the final pricing for its initial public offering (IPO) after the closing bell. The company is expected to price at $20 a share, in the middle of its range, according to sources.
Weekly mortgage applications rose slightly in the previous week, reversing five-consecutive weeks of declines, according to the Mortgage Bankers Association.
The government auctioned $21 billion in 10-year notes, at a high yield of 2.824 percent. The bid-to-cover ratio, an indicator of demand, was 2.61. This auction is a second leg of a three-part $64-billion sale of government debt this week and will be followed by a $13 billion reopening of a 30-year bond issue on Thursday.
Groupon rallied after Wells Fargo upgraded the daily-deals website to "outperform" from "market perform," citing the company's successful expansion beyond its daily deals origins and is taking more market share in the local commerce market.
Pandora tumbled sharply after rival Spotify launched a free music service for smart phones and tablets and confirmed it will offer a free version of its service for mobile phones and tablets. In addition, Spotify signed an exclusive deal that will bring Led Zeppelin's back catalogue to the streaming service.
Among earnings, Costco slid after the wholesale retailer posted earnings that missed expectations due to lower gasoline prices and weaker foreign currencies.
Joy Global dropped after the mining equipment company posted earnings that fell short of expectations by a penny a share and reported fiscal 2014 guidance that missed estimates.
Oil and gas pipeline operator Valero Energy Partners and owner of Chinese auto websites Autohome both surges in their market debuts.
Hotel chain Hilton Worldwide is expected to announce the final pricing for its initial public offering (IPO) after the closing bell. The company is expected to price at $20 a share, in the middle of its range, according to sources.
Weekly mortgage applications rose slightly in the previous week, reversing five-consecutive weeks of declines, according to the Mortgage Bankers Association.
The government auctioned $21 billion in 10-year notes, at a high yield of 2.824 percent. The bid-to-cover ratio, an indicator of demand, was 2.61. This auction is a second leg of a three-part $64-billion sale of government debt this week and will be followed by a $13 billion reopening of a 30-year bond issue on Thursday.
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