Wealth Manager - Essential news for investment professionals

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Overnight Markets: Wall Street retreats as Fed sticks to stimulus cuts

Overnight Markets: Wall Street retreats as Fed sticks to stimulus cuts

US stocks plunged more than 1% on Wednesday, dragging benchmark indexes to the lowest levels since November, after the Federal Reserve stuck with its plan to scale back stimulus even amid turmoil in emerging markets.

The Dow Jones industrial average fell 190 points or 1.19%, to end at 15,739. The S&P 500 lost 18 points or 1.02%, to finish at 1,774. The Nasdaq Composite dropped 47 points or 1.14%, to close at 4,051.

In its announcement, the Fed said it would buy $65 billion in bonds per month starting in February, down from $75 billion now. In what was Fed Chairman Ben Bernanke's last policy-setting meeting, the central bank also maintained its longer-term plan to keep US interest rates low for some time to come.

Trading was volatile after the Fed's move and declines were fairly broad-based. Stocks were lower early in the session even after bold efforts by Turkey and South Africa to stabilise their currencies.

South Africa's central bank raised interest rates for the first time in six years. Its move followed a surprise rate increase by Turkey's central bank late Tuesday.

Shares of Boeing Co (BA.N) ranked among the biggest drags on both the Dow and the S&P 500. The company’s stock fell 5.3%, after the aerospace and defense company issued conservative forecasts for profit and cash flow.

Yahoo (YHOO.O) shares dropped 8.7%, a day after the Internet company reported a drop in online ad prices that hurt its revenue for a fourth consecutive quarter.

Dow Chemical Co (DOW.N) gained 3.9% after it posted a quarterly profit that was well ahead of expectations. It also raised its dividend 15% and expanded its stock-buyback programme.

After the bell, shares of

Facebook (FB.O) jumped 9.2% in after-hours trading after the world's largest social networking company reported quarterly revenue increased 63%.

In Asia, shares declined on Thursday in morning trade after the Fed pressed on with cuts to US economic stimulus and as a report showed China’s manufacturing industry contracted.

The MSCI Asia Pacific Index lost 1.8% to 134 as of 9:56 a.m. in Hong Kong. Japan’s Topix index slumped 2.9% and the Nikkei 225 Stock Average tumbled 3.3% as the yen maintained its gains from yesterday, trading at 102.25 to the dollar.

Australia’s S&P/ASX 200 Index declined 1.1% and New Zealand’s NZX 50 Index slid 0.7%. Hong Kong’s Hang Seng Index fell 1.5% the Hang Seng China Enterprises Index of mainland Chinese stocks listed in the city slid 2.1%. China’s Shanghai Composite Index lost 0.5%, while Singapore’s Straits Times Index dropped 1.1%.

Markets in South Korea and Taiwan are closed today and Hong Kong and Singapore will shut early for the Chinese New Year holidays.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Your Business: Cover Star Club

Veteran banker boosts Sanlam’s stockbroking team

Veteran banker boosts Sanlam’s stockbroking team

A veteran private banker has been recruited by Sanlam Private Investments to strengthen its advisory stockbroking team.

Wealth Manager on Twitter