Major U.S. stock benchmarks fell on Wednesday, after dour U.S. growth data reinforced a decision by the Federal Reserve to maintain its commitment to massive economic stimulus.
a decision widely expected by analysts, the Fed emphasized that it
would stick to its bond buying program. That outcome was cast into doubt
just weeks ago, after minutes from the central bank's last policy
meeting showed some Fed members were growing concerned about ultra-low
The decision converged with data that showed the U.S. economy shrank by an annualized
0.1 percent in the final three months of 2012, and reinforced
expectations that the Fed would likely err on the side of more stimulus.
Despite a run of strong corporate earnings, the GDP data fanned
concerns about the economy's ability to absorb higher tax rates — some
of which took effect when the payroll tax holiday expired at the
beginning of the year — and efforts to cut government spending.
real risk out there, and the Fed was very vague in how they
characterized it…I think we're going to see major government spending
cuts that are going to come through sequestration," Diane Swonk, chief
economist and senior managing director, Mesirow Financial, told CNBC's "Street Signs"
is something the Fed has to deal with. That not only means weaker
growth, which justifies lower rates, but it also means more Fed action."
After floating for most of the session between modest gains and losses in directionless trading, the Dow Jones Industrial Average
shed about 44 points, trading around 13,910.42, drifting further away
from the psychologically-important 14,000 barrier being watched by
The S&P 500 Index slipped by nearly six points to 1,501.96, while the the Nasdaq dipped 11 points to trade above 3,142.31.
The CBOE Volatility Index (VIX), widely considered to be the market's best gauge of fear in the market, rose above just shy of 14.
Last updated : 14 Sep 2019
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