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

by Himanshu Singh on Jan 30, 2014 at 03:16

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%.

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