US stocks ended with steep losses on Wednesday, 19 June 2013. Stocks fell sharply and Treasury yields surged on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank may scale back its bond purchases this year, depending on the economic outlook.
For the day, the Dow Jones industrial average was down 205.66 points, (1.34%) at 15,112.57. The Standard & Poor's 500 Index was down 22.88 points (1.39%) at 1,628.93. The Nasdaq Composite Index was down 38.98 points (1.12%) at 3,443.20.
The FOMC said U.S. monetary policy will not see an imminent change even though the economy is expanding moderately. There was no mention about tapering of the Fed's monthly bond-buying program in the statement. However, Bernanke at his press conference did hint that the Fed in the coming months will back off the accelerator on its monthly bond buying.
Benchmark indexes initially cleared their losses after the Fed's policy statement, then fell hard as Bernanke said the Federal Open Market Committee currently anticipates moderating the monthly pace of purchases later this year, so long as incoming data support the Fed's forecast.
Elsewhere, Treasuries fell victim to aggressive selling pressure as a loss of more than one point ran the 10-yr yield up 14 basis points to 2.332%. This marked the highest close since March 2012.
The U.S. dollar index rallied sharply in the aftermath of the FOMC statement, which in turn put downside price pressure on the gold and silver markets.
Regarding economic data expected at Wall Street, the weekly MBA Mortgage Index declined 3.3% to follow the prior week's increase of 5.0%.
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Regarding major stocks under focus, shares of FedEx rose 1.1% after the airfreight company reported a better-than-expected profit. Adobe Systems climbed 5.6% a day after the design-software maker reported second-quarter profit that beat expectations. Tesla Motors jumped 1.3%. The electric-car maker late Tuesday said it was recalling some of its 2013 Model S cars due to a mounting defect involving rear seats. Sprint Nextel declined 4.4% after Dish Network opted to not hike its bid for the wireless carrier.
Bullion metal prices ended mixed on Wednesday, 19 June 2013 at Comex. Comex gold futures prices saw an initial moderately bearish price reaction to Wednesday afternoon's highly anticipated Federal Reserve Open Market Committee (FOMC) statement and the ensuing press conference held by Fed Chairman Bernanke.
Gold for August delivery ended higher by $7.1 (0.5%) at $1,374 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. July silver ended lower by $0.06 cents (0.4%) at $21.62 an ounce on Wednesday.
Crude-oil prices ended moderately lower on Wednesday, 19 June 2013 at Nymex. Prices fell following the weekly supply data showing unexpected climb in crude supplies for last week. Light and sweet crude for July ended lower by $0.20 (0.2%) at $98.24 a barrel on the New York Mercantile Exchange on Wednesday.
The weekly inventory report reported by EIA showed that supplies rose by 300,000 barrels for the week ended 14 June, to 394.1 million barrels. Market had forecast a 1 million-barrel decline. Gasoline supplies increased by 200,000 barrels, while distillate stockpiles fell by 500,000 barrels. Market was looking for a rise of 1.2 million barrels in gasoline inventories and an increase of 300,000 barrels in distillate supplies.
For every stock rising, nearly six fell on the New York Stock Exchange, where 760 million shares traded. Composite volume surpassed 3.5 billion.
Indian ADRs ended lower on Wednesday. In the IT space, Infosys was down 1.6% and Wipro was down 1.5%. In the Banking space, HDFC Bank was down 0.3% and ICICI Bank was down 2%. In other space, Tata Motors was down 2.7%, and Sterlite was up 0.7%.
For tomorrow, weekly initial claims will be reported at 8:30 ET while May existing home sales, leading indicators, and June Philadelphia Fed Survey will cross the wires at 10:00 ET.
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