Wall Street Hiccups After FOMC Minutes

Michael Teague |

Stocks ended significantly lower on Wednesday as existing home sales jumped 6.5 percent to a four-month high, and the released minutes of the Fed’s July Open Market Committee meeting indicating more or less unanimous agreement among central bankers on the need to reduce stimulus spending.

Still, the minutes from last month’s meeting ultimately gave little guidance to the possible timing for such a move, as an agreement over the need to reduce spending was tempered by concerns that September would be too soon to do so. Markets and financial media have been frenetically speculating when “tapering” could begin over the last few months, though the Fed has repeatedly and clearly stated the inflation and unemployment targets that it considers would adequately reflect the improvements it would like to see before asset and securities purchases can be reduced.

The Standard & Poor’s 500 ended 0.58 percent lower to close at 1,642.80, with the Dow Jones Industrial Average off by 0.7 percent to 14,897.55, while the NASDAQ dropped 0.38 percent to 3,599.79.

The volatile trading session saw stocks open lower, then rally significantly before eventually shedding gains as the yield on 10-year Treasury bonds jumped nearly 1.5 percent to $2.85.

On the S&P 500, Staples Inc. (SPLS) ended the day on a hefty 15 percent loss after its second quarter earnings report saw the company come up shy on profit expectations as well as reduced guidance for the remainder of the year. Brick-and-mortar services stocks were the biggest drag on the index overall, with significant losses for PetSmart Inc. (PETM) , J.C. Penney Company Inc. (JCP) , Target Corp. (TGT) and Abercrombie & Fitch Co. (ANF) .

All of the Dow’s components were in the red for the second time this week, with tech shares among the biggest losers, as Hewlett-Packard (HPQ) , Intel Corporation (INTC) , and Verizon Communications Inc. (VZ) all ended the day significantly lower.

Tech and Services shares were also lower on the NASDAQ, with Cisco Systems (CSCO) , Micron Technology (MU) , BlackBerry (BBRY) , Comcast ($CMCS), DIRECTV Inc. (DTV) and Twenty-First Century Fox Inc. (FOXA) all dropping on heavy 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
INTC Intel Corporation 35.76 0.06 0.17 16,320,019
SPLS Staples Inc. 10.01 0.01 0.10 6,888,688
TGT Target Corporation 77.39 -0.45 -0.58 4,047,567
CSCO Cisco Systems Inc. 30.06 0.11 0.37 21,342,232
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,099,544
HPQ HP Inc. 15.78 -0.38 -2.35 9,864,904
ANF Abercrombie & Fitch Company 15.79 -0.45 -2.77 2,344,891
MU Micron Technology Inc. 20.50 -0.16 -0.77 23,959,797
BBRY BlackBerry Limited 7.81 -0.02 -0.26 3,229,094
JCP J.C. Penney Company Inc. Holding Company 10.21 -0.35 -3.31 15,422,126
FOXA Twenty-First Century Fox Inc. 28.21 -0.43 -1.50 41,500,530
BTAM Ben-Tam Inc 0.12 0.00 0.00 0

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