The Clinton Herald, Clinton, Iowa

Business & Technology

November 21, 2013

Worries sends stocks lower

NEW YORK (AP) — The latest news from the Federal Reserve spooked investors Wednesday.

Stock and bond prices fell after minutes from the Fed’s latest meeting showed that the U.S. economy was improving steadily enough to warrant a reduction in its stimulus program.

The Fed has been buying $85 billion every month in Treasury and mortgage-backed bonds, which keeps long-term interest rates artificially low and makes stocks seem inexpensive in comparison to bonds.

“Investors need to be prepared to see the Fed wind down its program in the long term,” said Kristina Hooper, head of U.S. investment strategies for Allianz Global Investors.

The Fed’s economic stimulus has been a key driver of the stock market’s 25 percent surge this year, along with rising corporate profits and a recovering U.S. economy.

The Dow Jones industrial average lost 66.21 points, or 0.4 percent, to 15,900.82. It was up 20 points shortly before the minutes were released at 2 p.m. Eastern time.

The Standard & Poor’s 500 index was lost 6.50 points, or 0.4 percent, to 1,781.37. The Nasdaq lost 10.28 points, or 0.3 percent, to 3,921.27.

The market began the day higher after an encouraging report on retail sales and better news from long-struggling J.C. Penney.

Investors already know the Fed will reduce its economic stimulus eventually, yet they remain highly sensitive to concrete signals that a pullback is imminent and worry that the Fed might withdraw its support before the economy is ready.

Bond prices also declined. The yield on the benchmark 10-year Treasury note rose sharply, to 2.80 percent from 2.71 percent just before the minutes were released. That’s the highest since Sept. 17. Bond yields rise when demand for them falls.

The Fed’s next policy meeting is scheduled for Dec. 17-18. Investors are split on whether the bank will vote to pull back its bond purchases, or “taper” them, as it is sometimes called on Wall Street. The Fed surprised investors at its Sept. 17-18 meeting by keeping the bond purchases in place, despite widespread predictions that it would start to wind the program down.

Text Only
Business & Technology
  • 20140424-AMX-COFFEE24.jpg Coffee growers' prayers for rain met with threat of deluge

    Brazil's drought made arabica coffee this year's best-performing commodity. Now, farmers are facing a downpour that is once more threatening crops.

    April 24, 2014 1 Photo

  • The waffle taco's biggest enemy isn't McDonald's. It's consumer habits.

    Gesturing to Taco Bell, Thompson said McDonald's had "not seen an impact relative to the most recent competitor that entered the [breakfast] space," and that new competition would only make McDonald's pursue breakfast more aggressively.

    April 23, 2014

  • Apple offering free recycling of all used products

    Apple is offering free recycling of all its used products and vowing to power all of its stores, offices and data centers with renewable energy to reduce the pollution caused by its devices and online services.

    The iPhone and iPad maker is detailing its efforts to cultivate a greener Apple Inc. in an environmental section on the company's website that debuted Monday. The site highlights the ways that the Cupertino, Calif., company is increasing its reliance on alternative power sources and sending less electronic junk to landfills.

    April 21, 2014

  • Do White Castle prices tell us anything about the minimum wage?

    The paper looked at how many delicious steamed sliders the minimum wage has been able to purchase over time. The point is that as it notes, in 1981, the $3.35 minimum could buy a whole dozen. Today, at $7.25, it could purchase just 10.

    April 21, 2014

  • Smartphone kill switches are coming

    Smartphones need kill switches. It's a relatively easy solution to the pricey (and irritating) problem of smartphone theft. But who would have thought that the big carriers would team up with Apple, Google, Microsoft, Nokia, Samsung and lots of other manufacturers to voluntarily begin adding the technology by July 2015? The cooperative spirit! It makes so much sense!

    April 19, 2014

  • Minnick New director at Ashford CLINTON -- Ashford University has appointed a new vice president/campus director of its Clinton campus. Charlie Minnick has been appointed for the position. He has been in the position on an interim basis since Jan. 1. Ashford University Provost Lori

    April 19, 2014 1 Photo

  • McEleney McEleney elected to insurance board CLINTON -- A car dealership owner recently earned a spot on a national insurance board. John McEleney, of Clinton and owner of McEleney Motors, was elected to the Board of Directors of the Federated Insurance Companies. The election took place this w

    April 19, 2014 1 Photo

  • Biggest student loan profits come from grad students

    This week, the Congressional Budget Office projected that the federal government would earn roughly $127 billion from student lending during the next 10 years.

    April 18, 2014

  • NASA's moon-orbiting robot crashes down as planned

    April 18, 2014

  • Local farmers honored DES MOINES -- Iowa Secretary of Agriculture Bill Northey has announced that Marty and Michael Burken who run Blue Hyll Dairy in rural Clinton County have been named the April winners of the "Gary Wergin Good Farm Neighbor Award." Northey will present

    April 18, 2014

Facebook