Wall Street was lower heading into the weekend as comments from St. Louis Fed Reserve President James Bullard about fiscal stimulus erased much of the exuberance that had followed Chairman Ben Bernanke’s Wednesday announcement that the third round of quantitative easing would remain unchanged in the near-term.
After two mostly up days for stocks, and with little in the way of economic data points to be analyzed, Bullard suggested in an interview with Bloomberg TV that the modest reduction of stimulus that investors had been expecting near the end of Wednesday trading could indeed begin as early as next month.
The Standard & Poor’s 500 index dropped 0.72 percent in reaction to the news, closing the day at 1,709.91 points, while the Dow Jones Industrial Average was 1.19 percent off to end at 15,451.09, and the NASDAQ saw a more modest loss of 0.39 percent to 3.774.73 points.
Bullard’s words were compounded by a vote in the House of Representatives in favor of a move that, while partially averting a shutdown of the government, would also provide for the defunding of “Obamacare” legislation that was passed in 2010 and has been a conservative bête noire ever since.
The S&P 500 saw financial stocks lower on the day, largely the result of uncertainty over the future of interest rates. Bank of America (BAC) , Morgan Stanley (MS) , and Wells Fargo ($WFC) all ended the day lower on heavy trading. Basic materials stocks also had a rough day, with Newmont Mining (NEM) down over 5 percent off on gold’s reaction to stimulus news, followed by Cliff’s Natural Resources (CLF) and Peabody Energy (BTU) .
Most of the Dow’s components were in the red, with Caterpillar (CAT) and Microsoft (MSFT) down over 2 percent. Meanwhile, the NASDAQ was weighed down by heavy losses for BlackBerry (BBRY) , down almost 20 percent after announcing major layoffs, and Apple (AAPL) off about two-thirds of a percent.
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