View the article online at http://citywire.co.uk/money/article/a741744
Overnight Markets: Wall Street falls as Yellen outlines stimulus exit
Shares declined after the Fed chair said the central bank’s stimulus programme could end this fall, raising the possibility of an earlier-than-anticipated increase in interest rates.
Wall Street declined on Wednesday as Federal Reserve Chair Janet Yellen said the central bank’s stimulus programme could end this fall, raising the possibility of an earlier- than-anticipated increase in interest rates.
The Dow Jones industrial average fell 114 points or 0.70%, to end at 16,222. The S&P 500 slipped 11 points or 0.61%, to finish at 1,861. The Nasdaq Composite dropped 26 points or 0.59%, to close at 4,308.
The Fed yesterday made it clear that it would take into account a wide range of measures in deciding when to raise interest rates, effectively dropping the US unemployment rate as its definitive yardstick for gauging the economy's strength.
Shares fell after Yellen said the "considerable period" between the end of its quantitative easing programme and the first rate increase from the central bank could be six months.
The Fed added it would cut its monthly purchases of US Treasuries and mortgage-backed securities to $55 billion, from $65 billion.
Economic bellwether FedEx Corp (FDX.N) slipped 0.1% after it posted results below expectations and gave a weak full-year profit forecast.
Newmont Mining Corp. lost 3% as gold tumbled the most in six weeks after the Fed’s decision to reduce asset purchases. The precious metal for immediate delivery slumped 1.9% to $1,330.35 an ounce.
Walt Disney Co. lost 1.8%, Boeing Co. slid 1.5% and General Electric Co. declined 1.4% as 25 of 30 stocks in the Dow Jones declined.
SolarCity Corp. dropped 5.7% after the biggest US solar-power supplier by market value posted fourth-quarter net income of $26.7 million, compared with a loss of $33 million a year earlier, mainly from an acquisition-related tax benefit.
On the positive side, First Solar Inc (FSLR.O) surged 20.6% and ranked as the S&P 500's best performer after the company forecast a rise of up to 21% in revenue this year. First Solar also said it was developing cost-effective solar plants with GE.
In Asia, shares declined on Thursday in morning trade after the Fed hinted that it may raise US interest rates from the middle of next year.
The MSCI Asia Pacific Index declined 0.8% to 134 as of 9:45 a.m. in Tokyo. South Korea’s Kospi index fell 0.5%. Australia’s S&P/ASX 200 Index decreased 0.8% and New Zealand’s NZX 50 Index slipped 0.2%. Japan’s Topix index dropped 0.4%, reversing gains of as much as 0.6%.Hong Kong’s Hang Seng index was down 0.62%, while China’s Shanghai Composite Index gained 0.24%.
News sponsored by:
After Boris announced he was backing Brexit, sterling suffered its biggest slump in six years. Our Market Mavens discuss. Follow the Market Mavens LinkedIn page for weekly videos, in which our panel of industry experts share their views on financial news
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
More about this:
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.