US stocks hit by Ben Bernanke’s announcement
US stocks declined by 1 percent on the back of Ben Bernanke’s confirmation that the central bank for the world’s largest economy could begin to taper their quantitative easing within the next six months if the economic outlook in the United States looks positive.
The $85 billion monetary stimulus package has been the driving force of rallies in markets across the globe. The US index, the S&P 500, has advanced by almost 15 percent so far in 2013, however those advances came to an abrupt end on May 22nd when the Federal Reserve chairman suggested that the monetary policy could be brought to a close earlier than originally expected. Ben Bernanke went on to say that the central bank may also look to end the bond purchasing program by spring 2014, which gave investors a sliver of hope to hold onto.
Before the announcement was made Federal Reserve released a statement insisting that the new time the bond purchasing program would continue, which caused a momentary rising stocks. However, after the press conference stocks began to decline. There were a lot of mixed messages coming from the meeting when many analysts had expected it to be passed over. Some analysts have even gone as far as to say this drove the markets lower as uncertainty began to once again cloud the judgement of investors.
The S&P 500 declined by 1.39 percent leading the Dow Jones Industrial Average and NASDAQ in declines as they fell by 1.35 percent and 1.12 percent respectively. All of the DJIA’s constituents fell for the day, however Hewlett-Packard Co was the least affected with a loss of 0.04 percent. Caterpillar Inc, Merck & Co Inc and Cisco Systems Inc joined Hewlett-Packard at the top of the index registering declines of 0.35 percent, 0.36 percent and 0.56 percent respectively.
Wireless operators led the declines with Verizon communications falling by 2.91 percent and AT&T declining by 2.54 percent. Additionally United Technologies and Intel Corp. fell by 2.07 percent and 1.83 percent respectively. Retailers Wal-Mart and Home Depot also ended up just inside the bottom 10 stocks on the Dow Jones Industrial Average as they both saw their stock slide by 1.6 percent.