clear
Wednesday July 29th, 2015 6:05PM

Stocks extend slide after Fed comments

By The Associated Press
NEW YORK (AP) -- Stocks and bonds extended their slide after the Federal Reserve said it could start scaling back its economic stimulus program later this year.

Comments from Fed Chairman Ben Bernanke in a press conference prompted stock and bond markets to slump Wednesday, and the wave of selling continued in global markets Thursday. Gold led a plunge in commodity prices and the dollar rose against other currencies.

Alec Young, a global equity strategist at S&P Capital IQ, said investors weren't expecting Bernanke to say the program could end so quickly, and are now having to adjust their holdings to anticipate higher U.S. interest rates.

"What we're seeing is a pretty significant sea-change in investor strategy," Young said.

The Federal Reserve is buying $85 billion worth of bonds every month to hold down long-term interest rates and encourage borrowing. The stimulus has been a major support for the economy and helped drive a rally in stocks that pushed the Dow and the S&P 500 to record levels this year.

Stocks that benefited the most from the Fed's policy - such as the high-dividend stocks investors favored early this year - were among those that among those fell the most. Energy companies also plunged as the price of oil fell sharply. The threat of higher interest rates also pushed the stocks of home builders lower.

The Dow Jones industrial average was down 231 points, or 1.5 percent, to 14,878 after the first hour of trading. The Standard & Poor's 500 index dropped 26 points, or 1.6 percent, to 1,602. The Nasdaq composite fell 48 points, or 1.4 percent, to 3,412.

The yield on the 10-year Treasury note rose to 2.38 percent from 2.35 percent Wednesday. The yield, which rises as the price of the note falls, surged 0.16 percentage point Wednesday after the Fed's comments. It's up sharply since May 3, when it hit a low of for the year of 1.63 percent.

Government bond yields are used as benchmarks for mortgage rates. The sharp increase in yields prompted investors to sell the stocks of homebuilders, whose business would be hurt if the pace of home buying slows down. PulteGroup fell the most of any stock in the S&P 500 index, giving up $1.49, or 7 percent, to $19.30. D.R. Horton fell $1.11, or 4.7 percent, to $22.29.

Global markets also fell. Japan's Nikkei index lost 1.7 percent. In Europe, the FTSE 100 index of leading British shares was down 2.8 percent while Germany's DAX fell 2.9 percent.

In currency trading, the dollar rose against the euro and the Japanese yen.

In commodities trading, Gold plunged $72, or 5 percent, to $1,301 an ounce. The precious metal has slumped 23 percent this year as its attraction as an alternative investment has faded as the dollar and bond yields have risen.

The price of crude oil fell $3.06, or 3 percent, to $95.44 a barrel in New York.

Among other stocks making big moves:

- Jabil Circuit fell 79 cents, or 3.7 percent, to $19.09, after the electronics manufacturer said its net income fell by half in the fiscal third quarter due to restructuring costs. Jabil's profit forecast for the current quarter also disappointed investors.

- GameStop, a video game store chain that sells new and used games, rose $1.53, or 3.8 percent, to $40.03 after Microsoft backpedaled and said that there will be no limitations on sharing games on its upcoming Xbox One gaming console.
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Feeling US snub, Saudis strengthen ties elsewhere
Increasingly vocal in its frustration over U.S. policies in the Mideast, Saudi Arabia is strengthening ties elsewhere, seeking out an alignment that will bolster its position after it was pushed to the sidelines this year.
4:34PM ( 1 year ago )
NSA reportedly intercepts computer deliveries
A German magazine has lifted the lid on the operations of the National Security Agency's hacker unit, revealing how American spies intercepted computer deliveries, exploited hardware vulnerabilities, and even hijacked Microsoft's bug report system to spy on their targets.
12:31PM ( 1 year ago )
Rockets fired from Lebanon into Israel
Rockets from Lebanon struck northern Israel on Sunday, causing no injuries but sparking an Israeli reprisal shelling in a rare flare-up between the two countries.
12:26PM ( 1 year ago )
Politics
House votes to provide money for highways, transit
WASHINGTON (AP) — The House voted overwhelmingly on Wednesday to shore up federal highway aid and veterans' health care before heading out of town for its August recess, leaving unresolved an array of...
5:51PM ( 13 minutes ago )
Stocks end higher after Fed keeps interest rates unchanged
NEW YORK (AP) — U.S. stocks rose on Wednesday after Federal Reserve policymakers voted to keep interest rates unchanged and gave no indication that a rate rise was imminent. A modest rebound in Chines...
5:10PM ( 54 minutes ago )
GOP presses Planned Parenthood aid ban, faces long odds
WASHINGTON (AP) — Senate Republicans pressed their fight Wednesday to bar federal aid to Planned Parenthood, but likely opposition from at least one GOP senator highlighted the long odds they face to...
4:26PM ( 1 hour ago )
Los Angeles leaders outlaw high-capacity gun magazines
LOS ANGELES (AP) — Leaders in Los Angeles unanimously voted to ban the sale of high-capacity gun magazines, putting the city in the middle of the debate over national gun control following mass shooti...
2:44PM ( 3 hours ago )
Health care spending to accelerate, US report says
WASHINGTON (AP) — It's lasted six years. But now welcome relief from rising U.S. health care costs seems to be winding down.
8:29AM ( 9 hours ago )