NEW YORK (TheStreet) -- The major U.S. stock averages suffered steep losses Tuesday after a Federal Reserve official said he believes it's unlikely the central bank's third round of quantitative easing will meaningfully boost the economy.
"We are unlikely to see much benefit to growth or to employment from further asset purchases," said Philadelphia Fed President Charles Plosser, according to the published text of a speech to be delivered before the CFA Society and the Bond Club of Philadelphia.
Plosser, a well known hawk on monetary policy, also said the open-ending bond buying program could ultimately hurt the Fed's credibility.
The comments teamed with a cautionary outlook from heavy equipment giant Caterpillar (CAT) to dampen investor sentiment and offset an early positive influence on trading from strong data on consumer confidence and housing.The Dow Jones Industrial Average fell more than 101 points, or 0.75%, to close at 13,458. The blue-chip index, which has now lost ground in the three straight sessions, ranged as high as 13,620 earlier in the session and closed just above its low for the day. Breadth was very negative with laggards outpacing advancers, 25 to 5. The biggest decliners were Caterpillar, Hewlett-Packard (HPQ), Alcoa (AA) and United Technologies (UTX). Shares of Caterpillar shed more than 4% after the company took a measured view of the global economy over the next few years, issuing a 2015 forecast that's below current Wall Street expectations. Home Depot (HD), Pfizer (PFE), and Johnson & Johnson (JNJ) were among the few Dow gainers. The S&P 500 finished down more than 15 points, or 1.1%, at 1441.59, while the Nasdaq slid 43 points, or 1.4%, to settle at 3118. The weakest industry areas of the broad market were technology, capital goods and basic materials as every sector finished lower. Volume totaled 3.68 billion on the Big Board and 1.98 billion on the Nasdaq. Stocks were in the green for most of the morning, boosted by a batch of encouraging economic reports. The Conference Board's Consumer Confidence Index rebounded in September back to levels seen earlier this year with the index now standing at 70.3, better than the consensus expectation of 63, and above the upwardly-revised 61.3 level in August.
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