Stocks Get Tapered
Wall Street Sector Selector | Sep 13, 2013 01:19AM ET
The major stock indices bounced around on Thursday, as the recent phase of bullishness was tempered by speculation that the Federal Reserve will proceed to taper its bond-buying by $10 billion, rather than $15 billion, as previously expected. The dreaded taper – once it goes into effect – is expected to send stocks lower. In fact, mere speculation on the subject by commentators sent the S&P 500 falling 3.1 percent during August.
Since PIMCO’s Bill Gross first mentioned the possibility of what he called a “Taper Lite”, the theme has been adopted by many commentators who expect the FOMC to vote in favor of a cutback at its September 17-18 monetary policy meeting. The Fed has been purchasing $40 billion in mortgage-backed securities and $45 billion in Treasury securities (bonds, bills, notes, coupons, etc.) every month during the third phase of quantitative easing.
The Dow Jones Industrial Average (DIA) lost 25 points to finish Thursday’s trading session at 15,300 for a 0.17 percent decline. The S&P 500 (SPY) fell 0.34 percent to close at 1,683.
The Nasdaq 100 (QQQ) declined 0.14 percent to finish at 3,175. The Russell 2000 (IWM) dropped 0.65 percent to end the day at 1,048.
In other major markets, oil (USO) climbed by exactly one percent to close at $38.87.
On London’s ICE Futures Europe Exchange, November futures for Brent crude oil rose $1.54 (1.40 percent) to $111.73/bbl. (BNO).
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