Stocks Slip as Investors Mull Fed's Next Move
NEW YORK (TheStreet) -- Major U.S. stock markets pulled back Wednesday on concern the Federal Reserve's decision to scale back its stimulus program may take place sooner than expected, and as the Organization for Economic Cooperation and Development lowered its outlook for global growth.
The S&P 500 fell 0.7% to 1,648.36.
Investors have been forced to interpret signals, often vague, from the Fed's meetings and various speeches by bank presidents, including Chairman Ben Bernanke. The upshot is a market that has surged in 2013 by 15.6% this year, the most since 1991, an advance fueled in part by cheap money available as a result of the Fed's bond-buying stimulus programs.
"While we expect the Federal Reserve's shift away from its current stance to be slow and gradual, investors will need to become acclimated to the reality that policy can also tighten," Russ Koesterich, global chief investment strategist at BlackRock in New York wrote in a note. "We are hardly suggesting that investors should abandon stocks, but we would argue that investors should prepare themselves for more bumps along the way."The Dow Jones Industrial Average was down 0.69% to 15,302.8 while the Nasdaq shed 0.61% to 3,467.52. Newmont Mining (NEM) was among the top performing stocks on the S&P as the gold mining company gained in step with other miners. Shares added 3.2% to $33.09 a share. Gold miners typically receive a boost when the price of gold on futures markets moves higher. June gold futures gained $12.40 to settle at $1,391.30 an ounce. The OECD, in a biannual economic publication, lowered its overall outlook on global economic growth to 3.1% this year and 4% next year from the November estimate of 3.4% in 2012 and 4.2% in 2013. The economic council said that while joblessness will reverse somewhat in the U.S. and Japan over the coming two years, unemployment is likely to continue to rise in the eurozone, reaching as high as 12% in 2014. July crude oil futures fell $1.88 to close at $93.13 a barrel. SLM Corp. (SLM) added 2.2% to $23.48 after the largest U.S. student loan provider announced that it will split into two publicly traded companies and announced that Chief Operating Officer John Remondi has been appointed as new CEO. Michael Kors (KORS) rose 3.2% to $63.95 after the fashion accessories retailer surprised Wall Street on Wednesday by beating earnings estimates on both the top- and bottom-line. "Our robust fourth-quarter results were driven by continued strength across all of our business segments and geographies," Chairman and CEO John D. Idol said in a statement. Tyson Foods (TSN) increased 2.2% to $25.36, rubbing off of upbeat developments on Smithfield Foods (SFD). Smithfield was soaring 25.49% to $32.59 after the meat processor announced that it has agreed to sell itself to Chinese meat processor Shuanghui Group of China for about $4.7 billion. Follow @atwtse Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.
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