U.S. stocks and Treasury prices dived Tuesday after Federal Reserve policymakers said they were worried that hiring might slow down if economic growth does not pick up.
The Dow Jones industrial average was down 90 points to 13,174 with about a half-hour of trading to go. It was down about 40 points when the Fed released minutes from its March meeting at 2 p.m.
The Standard & Poor's 500 index was down 10 points to 1,410. The Nasdaq composite index dropped 14 to 3,105.Rampant selling by bond traders raised the yield on the 10-year Treasury note to 2.28 percent from 2.16 percent earlier Tuesday. Traders of stocks and government bonds were selling because the Fed, despite the dimmer outlook, did not appear likely to buy more bonds to help the economy, said Stephen Carl, head equity trader at The Williams Capital Group. The Fed minutes showed that policymakers had spent little time discussing another round of bond purchases to help the economy. The Fed has embarked on two previous rounds of bond-buying, most recently in August 2010, to drive down long-term interest rates and encourage investors to buy stocks. Among the other ripples in the financial markets in the first hour after the Fed's announcement: â¿¿ The sell-off in Treasurys was broad. The price of the 30-year Treasury bond fell $2.53 per $100 invested, pushing its yield up to 3.40 percent from 3.32 percent before the Fed minutes. â¿¿ Gold fell $38 an ounce to $1,642. The selling started shortly before the Fed minutes were released. Gold had been unchanged for most of the morning. â¿¿ The dollar rose against the euro, also after being virtually unchanged for most of the day. The euro was down 1.1 cents against the dollar to $1.322 in afternoon trading. Many traders were in wait-and-see mode all morning before the Fed minutes were released. Stocks drifted lower despite solid reports on auto sales and factory activity.