Stocks Fall as Budget Deal Stokes Fears of Taper

Michael Teague  |

Stocks fell substantially to send Wall Street lower by the end of Wednesday’s trading session as investors put yet a new spin on the term “taper tantrum” by reacting to an uncharacteristically early and painless bipartisan budget deal in Washington D.C. with a robust sell-off.

The Standard & Poor’s 500 index was off by 1.13 percent to 1,782.22 points, while the Dow Jones Industrials were down 0.81 percent to 15,843.53, with the NASDAQ taking the heaviest losses on a decline of 1.40 percent, but still hanging on above 4,000 at 4,003.81.

Wednesdays congressional budget deal came well ahead of deadline, a circumstance that, according to some analysts, would not have been possible without a substantially improving economy, leading to widespread fear that Fed could announce the beginning of the end of fiscal stimulus as early as next week.

On the Dow, Visa Inc. (V) provided the only real bright spot on the day, gaining over 3 percent in reaction to the news that competitor MasterCard (MA) would be announcing a 10-1 stock split and $3.5 billion in share repurchases.

On the S&P, financial stocks ended lower with the official enactment of the Volker Rule that prevents institutions from engaging in the riskiest trading behaviors. JPMorgan Chase (JPM) , Bank of America (BAC) , and Citigroup (C) were all off over one percent on some of the heaviest trading on the index,

On the upside, drug manufacturer Abb Vie Inc. (ABBV) added 1 percent, while on the NASDAQ, micro-cap biotech firm CytRx Corporation soared nearly 70 percent on news of extremely positive results from a cancer treatment it is currently developing.

Tech shares were among the NASDAQ’s hardest-hit in the day’s sell off. with Cisco Systems (CSCO) , Micron Technology (MU) , Microsoft (MSFT) , Facebook (FB) , Intel (INTC) and Yahoo! (YHOO) all off by over 1.5 percent on the heaviest trading.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 162.56 0.27 0.17 11,770,692 Trade
INTC Intel Corporation 51.39 -0.01 -0.02 21,607,726 Trade
C Citigroup Inc. 64.64 0.26 0.40 10,545,040 Trade
MA Mastercard Incorporated 221.11 0.52 0.24 3,103,564 Trade
V Visa Inc. 144.73 0.29 0.20 5,283,077 Trade
CSCO Cisco Systems Inc. 49.63 -0.02 -0.04 17,550,893 Trade
ABBV AbbVie Inc. 79.99 -0.53 -0.66 5,564,105 Trade
BAC Bank of America Corporation 29.41 0.28 0.96 42,806,327 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
MU Micron Technology Inc. 42.21 0.25 0.60 28,048,715 Trade
MSFT Microsoft Corporation 107.15 -1.02 -0.94 21,607,671 Trade
CNUN Community Bancshares Inc (OH) n/a n/a n/a 0

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DIS

     
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