This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Stocks Drop on Concern Fed Support Waning for Stimulus

NEW YORK (TheStreet) -- U.S. stocks declined Wednesday as the Federal Reserve opted to maintain its current $85 billion bond-buying program and keep interest rates at current low levels, citing an elevated jobless rate and a slowdown in the housing market's recovery.

Markets fell on concerns the Fed may still pullback on its stimulus program in December, or early next year. In a policy statement, the central bank said that overall all "the downside risks to the outlook for the economy and the labor market" .... have "diminished," indicating that the worst of the 2009 recession, which prompted the stimulus program has passed.

TheS&P 500closed down 0.49% to 1,763.30. TheDow Jones Industrial Averagelost 0.39% to 15,618.64, while theNasdaqdropped 0.55% to 3,930.62.

The Fed dropped language about concerns that financial market tightening could present a drag on economic growth.

"Folks are saying, 'OK, look, the Fed was uncomfortable with the 10-year [Treasury] rate when it was 2.75%, 2.8%, but [the central bank] is comfortable with it at 2.45%,'" Thomas Tzitzouris, head of fixed income research at Strategas Research Partners, said in a phone interview from Washington. "And we've been buying on the expectation that the Fed was not comfortable with the levels we were at, and so maybe its time to take some profit."

Electronic Arts  (EA) surged 7.8% to $26.00 after the video game publisher posted fiscal second-quarter earnings that raced past estimates by 20 cents at 33 cents a share on revenue that beat expectations as its portfolio of sports titles grew, boosting gains in digital revenue. Electronic Arts has hiked its full-year guidance on optimism that the company will deliver a "full slate of amazing games and services to players on current and next-generation consoles, mobile, and PC."

Sealed Air Corp  (SEE) gained 6.4% to $30.35 after the consumer packaging company reported a swing to third-quarter profit and earnings per share that beat estimates by 6 cents at 39 cents a share as revenue increased 2.9% to $1.9 billion. During the quarter, the food care, product care and medical applications segments all posted sales gains.

Western Union  (WU) dropped 12.4% to $16.85 after the payment services company lowered its full year earnings outlook and said that it no longer expects operating profit growth amid an increase in compliance related expenses driven by an increasingly strict legal and regulatory environment. The company said that it expects expenses of this nature to increase to a range of about 3.5% to 4.5% of revenue in 2014 from 2.5% of revenue in 2013.

Teva Pharmaceuticals  (TEVA) surrendered 8.1% to $38.70 after it was revealed that CEO and President Dr. Jeremy Levin stepped down amid rumors of executive infighting. Executive VP and CFO Eyal Desheh will temporarily assume the positions until a successor has been found.

Private payrolls increased less than expected in October, according to payroll processor Automatic Data Processing, possibly reflecting some impact from the government shutdown and earlier reinforcing predictions that the Fed would refrain from immediate tapering as job creation has yet to pick up more pace. An increase of 130,000 was reported for October, which was below that 150,000 gain expected by economists, and after a downwardly revised 145,000 in September.

Further fueling views, before the announcement, that the Fed still has more room to persist with its current level of stimulus were subdued inflation numbers out Wednesday as indicated by theConsumer Price Index. An as expected headline level of 0.2% for September was reported.

The benchmark 10-year Treasury was down 8/32, lifting the yield to 2.541%.

--Written by Andrea Tse and Joe Deaux in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,161.61 +29.64 0.17%
S&P 500 2,007.01 +8.03 0.40%
NASDAQ 4,574.92 +22.1610 0.49%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs