Stocks Slip on Concern Job Picture Sufficient to Warrant Fed Cutback
NEW YORK (TheStreet) - U.S. stock indices slipped Thursday after a weekly jobless claim report was seen as sufficient enough to prompt the Federal Reserve to curb the bond-buying stimulus measures that have fueled the best year in equities since 1997.
The Fed's policy making committee is scheduled to begin a two-day gathering on Sept. 17 to discuss the possible reduction in the roughly $850 billion in bond buying that has helped the U.S. economy recover from the recession of 2008. The central bank is expected to announce its economic projections at the conclusion of the meeting on Sept. 18.
Weekly jobless claims for the week ended Sept. 7 fell by 31,000 to 292,000, the Labor Department reported in data released in Washington. Economists polled by Thomson Reuters were expecting claims to rise slightly to 330,000, up from the prior week's 323,000. The number may have been lower than expected, because two states failed to report for the week."I think that anybody who is rooting for taper-zero or taper light, I believe the Federal Reserve is going to do the full taper, which is consensus $20 billion [tapering] down to $65 billion," said Doug Cote, chief market strategist at ING Investment Management U.S. The central bank has said its decision to taper would be heavily influenced by the strength of labor market data. Markets generally view tapering as short-term negative for markets as analysts have said the Fed's economic stimulus has boosted stocks from their Great Recession lows in March 2009 past the record highs hit this past summer. In company news, Pandora (P) surged 12% to $23.97 after the online music streaming service named Brian McAndrews its CEO and president. Yahoo! (YHOO) gained 1.6% to 29.65 after CEO Marissa Mayer said Wednesday that the Internet portal has about 800 million worldwide users, a 20% increase since she took control of the company 15 months ago.
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