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.